In the nature of a substitute.

SA 4387. Mr. DODD (for himself and Mr. Shelby) submitted an amendment
intended to be proposed by him to the bill H.R. 3221, moving the United
States toward greater energy independence and security, developing
innovative new technologies, reducing carbon emissions, creating green
jobs, protecting consumers, increasing clean renewable energy
production, and modernizing our energy infrastructure, and to amend the
Internal Revenue Code of 1986 to provide tax incentives for the
production of renewable energy and energy conservation; as follows:

Strike all after the enacting clause and insert the
following:

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) Short Title.--This Act may be cited as the
``Foreclosure Prevention Act of 2008''.
(b) Table of Contents.--The table of contents for this Act
is as follows:

Sec. 1. Short title; table of contents.

TITLE I--FHA MODERNIZATION ACT OF 2008

Sec. 101. Short title.

Subtitle A--Building American Homeownership

Sec. 111. Short title.
Sec. 112. Maximum principal loan obligation.
Sec. 113. Cash investment requirement and prohibition of seller-funded
downpayment assistance.
Sec. 114. Mortgage insurance premiums.
Sec. 115. Rehabilitation loans.
Sec. 116. Discretionary action.
Sec. 117. Insurance of condominiums.
Sec. 118. Mutual Mortgage Insurance Fund.
Sec. 119. Hawaiian home lands and Indian reservations.
Sec. 120. Conforming and technical amendments.
Sec. 121. Insurance of mortgages.
Sec. 122. Home equity conversion mortgages.
Sec. 123. Energy efficient mortgages program.
Sec. 124. Pilot program for automated process for borrowers without
sufficient credit history.
Sec. 125. Homeownership preservation.
Sec. 126. Use of FHA savings for improvements in FHA technologies,
procedures, processes, program performance, staffing, and
salaries.
Sec. 127. Post-purchase housing counseling eligibility improvements.
Sec. 128. Pre-purchase homeownership counseling demonstration.
Sec. 129. Fraud prevention.
Sec. 130. Limitation on mortgage insurance premium increases.
Sec. 131. Savings provision.
Sec. 132. Implementation.
Sec. 133. Moratorium on implementation of risk-based premiums.

Subtitle B--Manufactured Housing Loan Modernization

Sec. 141. Short title.
Sec. 142. Purposes.
Sec. 143. Exception to limitation on financial institution portfolio.
Sec. 144. Insurance benefits.
Sec. 145. Maximum loan limits.
Sec. 146. Insurance premiums.
Sec. 147. Technical corrections.
Sec. 148. Revision of underwriting criteria.
Sec. 149. Prohibition against kickbacks and unearned fees.
Sec. 150. Leasehold requirements.

TITLE II--MORTGAGE FORECLOSURE PROTECTIONS FOR SERVICEMEMBERS

Sec. 201. Temporary increase in maximum loan guaranty amount for
certain housing loans guaranteed by the Secretary of
Veterans Affairs.
Sec. 202. Counseling on mortgage foreclosures for members of the Armed
Forces returning from service abroad.
Sec. 203. Enhancement of protections for servicemembers relating to
mortgages and mortgage foreclosures.

TITLE III--EMERGENCY ASSISTANCE FOR THE REDEVELOPMENT OF ABANDONED AND
FORECLOSED HOMES

Sec. 301. Emergency assistance for the redevelopment of abandoned and
foreclosed homes.

TITLE IV--HOUSING COUNSELING RESOURCES

Sec. 401. Housing counseling resources.

TITLE V--MORTGAGE DISCLOSURE IMPROVEMENT ACT

Sec. 501. Short title.
Sec. 502. Enhanced mortgage loan disclosures.

TITLE VI--TAX-RELATED PROVISIONS

Sec. 601. Election for 4-year carryback of certain net operating losses
and temporary suspension of 90 percent AMT limit.
Sec. 602. Modifications on use of qualified mortgage bonds; temporary
increased volume cap for certain housing bonds.
Sec. 603. Credit for certain home purchases.
Sec. 604. Additional standard deduction for real property taxes for
nonitemizers.

TITLE VII--EMERGENCY DESIGNATION

Sec. 701. Emergency designation.

TITLE I--FHA MODERNIZATION ACT OF 2008

SEC. 101. SHORT TITLE.

This title may be cited as the ``FHA Modernization Act of
2008''.

Subtitle A--Building American Homeownership

SEC. 111. SHORT TITLE.

This subtitle may be cited as the ``Building American
Homeownership Act of 2008''.

SEC. 112. MAXIMUM PRINCIPAL LOAN OBLIGATION.

(a) In General.--Paragraph (2) of section 203(b)(2) of the
National Housing Act (12 U.S.C. 1709(b)(2)) is amended--
(1) by amending subparagraphs (A) and (B) to read as
follows:
``(A) not to exceed the lesser of--
``(i) in the case of a 1-family residence, 110 percent of
the median 1-family house price in the area, as determined by
the Secretary; and in the case of a 2-, 3-, or 4-family
residence, the percentage of such median price that bears the
same ratio to such median price as the dollar amount
limitation in effect for 2007 under section 305(a)(2) of the
Federal Home Loan Mortgage Corporation Act (12 U.S.C.
1454(a)(2)) for a 2-, 3-, or 4-family residence,
respectively, bears to the dollar amount limitation in effect
for 2007 under such section for a 1-family residence; or
``(ii) 132 percent of the dollar amount limitation in
effect for 2007 under such section 305(a)(2) for a residence
of the applicable size (without regard to any authority to
increase such limitations with respect to properties located
in Alaska, Guam, Hawaii, or the Virgin Islands), except that
each such maximum dollar amount shall be adjusted effective
January 1 of each year beginning with 2009, by adding to or
subtracting from each such 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
adjustments under this clause;

except that the dollar amount limitation in effect under this
subparagraph for any size residence 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
applicable size, as such limitation is adjusted by any
subsequent percentage adjustments determined under clause
(ii) of this subparagraph; and
``(B) not to exceed 100 percent of the appraised value of
the property.''; and
(2) in the matter following subparagraph (B), by striking
the second sentence (relating to a definition of ``average
closing cost'') and all that follows through ``section
3103A(d) of title 38, United States Code.''.
(b) Effective Date.--The amendments made by subsection (a)
shall take effect upon the expiration of the date described
in section 202(a) of the Economic Stimulus Act of 2008
(Public Law 110-185).

SEC. 113. CASH INVESTMENT REQUIREMENT AND PROHIBITION OF
SELLER-FUNDED DOWNPAYMENT ASSISTANCE.

Paragraph 9 of section 203(b) of the National Housing Act
(12 U.S.C. 1709(b)(9)) is amended to read as follows:
``(9) Cash investment requirement.--
``(A) In general.--A mortgage insured under this section
shall be executed by a mortgagor who shall have paid, in
cash, on account of the property an amount equal to not less
than 3.5 percent of the appraised value of the property or
such larger amount as the Secretary may determine.
``(B) Family members.--For purposes of this paragraph, the
Secretary shall consider as cash or its equivalent any
amounts borrowed from a family member (as such term is
defined in section 201), subject only to the requirements
that, in any case in which the repayment of such borrowed
amounts is secured by a lien against the property, that--
``(i) such lien shall be subordinate to the mortgage; and
``(ii) the sum of the principal obligation of the mortgage
and the obligation secured by such lien may not exceed 100
percent of the appraised value of the property.

[[Page S2488]]

``(C) Prohibited sources.--In no case shall the funds
required by subparagraph (A) consist, in whole or in part, of
funds provided by any of the following parties before,
during, or after closing of the property sale:
``(i) The seller or any other person or entity that
financially benefits from the transaction.
``(ii) Any third party or entity that is reimbursed,
directly or indirectly, by any of the parties described in
clause (i).''.

SEC. 114. MORTGAGE INSURANCE PREMIUMS.

Section 203(c)(2) of the National Housing Act (12 U.S.C.
1709(c)(2)) is amended--
(1) in the matter preceding subparagraph (A), by striking
``or of the General Insurance Fund'' and all that follows
through ``section 234(c),,''; and
(2) in subparagraph (A)--
(A) by striking ``2.25 percent'' and inserting ``3
percent''; and
(B) by striking ``2.0 percent'' and inserting ``2.75
percent''.

SEC. 115. REHABILITATION LOANS.

Subsection (k) of section 203 of the National Housing Act
(12 U.S.C. 1709(k)) is amended--
(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. 116. 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 ``section 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 subsection (d) of section
202, and redesignating such subsection as subsection (e).

SEC. 117. INSURANCE OF CONDOMINIUMS.

(a) In General.--Section 234 of the National Housing Act
(12 U.S.C. 1715y) is amended--
(1) in subsection (c), in the first sentence--
(A) by striking ``and'' before ``(2)''; and
(B) 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
(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 amended--
(1) before ``a first mortgage'' insert ``(A)'';
(2) by striking ``or on a leasehold (1)'' and inserting
``(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 following: ``, 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 common areas and facilities which serve the project''.
(c) Definition of Real Estate.--Section 201 of the National
Housing Act (12 U.S.C. 1707) is amended by adding at the end
the following new subsection:
``(g) The term `real estate' means land and all natural
resources and structures permanently affixed to the land,
including residential buildings and stationary manufactured
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.''.

SEC. 118. 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 provisions of the
Federal Credit Reform Act of 1990, there is hereby created a
Mutual Mortgage Insurance 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
insured under section 203. The Secretary may enter into
commitments to guarantee, and may guarantee, such insured
mortgages.
``(2) Limit on loan guarantees.--The authority of the
Secretary to enter into commitments to guarantee such insured
mortgages shall be effective 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 Secretary has a
responsibility to ensure that the Mutual Mortgage Insurance
Fund remains financially sound.
``(4) Annual independent actuarial study.--The Secretary
shall provide for an independent 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 remains financially sound.
``(5) Quarterly reports.--During each fiscal year, the
Secretary shall submit a report to the Congress for each
calendar quarter, which shall specify for mortgages that are
obligations of the Fund--
``(A) the cumulative volume of loan guarantee 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, categorized by risk;
``(C) any significant changes between actual and projected
claim and prepayment activity;
``(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 adjustments 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 on the last day of the first full calendar quarter
following the enactment of the Building American
Homeownership Act of 2008, whichever is later.
``(6) Adjustment of premiums.--If, pursuant to the
independent actuarial study of the Fund required under
paragraph (4), the Secretary determines that the Fund is not
meeting the operational goals established under paragraph (7)
or there is a substantial probability that the Fund will not
maintain its established target subsidy rate, the Secretary
may either make programmatic adjustments under this title as
necessary to reduce the risk to the Fund, or make appropriate
premium adjustments.
``(7) Operational goals.--The operational goals for the
Fund are--
``(A) to minimize the default risk to the Fund and to
homeowners by among other actions instituting fraud
prevention quality control screening not later than 18 months
after the date of enactment of the Building American
Homeownership Act of 2008; and
``(B) to meet the housing needs of the borrowers that the
single family mortgage insurance 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 through the end of the
subsection and inserting ``Mutual Mortgage Insurance Fund.''.
(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 striking ``General Insurance Fund'' and inserting
``Mutual 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. 119. HAWAIIAN HOME LANDS AND INDIAN RESERVATIONS.

(a) Hawaiian Home Lands.--Section 247(c) of the National
Housing Act (12 U.S.C. 1715z-12(c)) is amended--
(1) by striking ``General Insurance Fund established in
section 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)''.
(b) Indian Reservations.--Section 248(f) of the National
Housing Act (12 U.S.C. 1715z-13(f)) is amended--
(1) by striking ``General Insurance Fund'' the first place
it appears 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. 120. CONFORMING AND TECHNICAL AMENDMENTS.

(a) Repeals.--The following provisions of the National
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 amended by
striking ``shall'' and all that follows and inserting

[[Page S2489]]

``means a metropolitan statistical area as established 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. 121. INSURANCE OF MORTGAGES.

Subsection (n)(2) of section 203 of the National Housing
Act (12 U.S.C. 1709(n)(2)) is amended--
(1) in subparagraph (A), by inserting ``or subordinate
mortgage or'' before ``lien given''; and
(2) in subparagraph (C), by inserting ``or subordinate
mortgage or'' before ``lien''.

SEC. 122. 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 (g), by striking ``established under
section 203(b)(2)'' and all that follows through ``located''
and inserting ``limitation established under section
305(a)(2) of the Federal Home Loan Mortgage Corporation Act
for a 1-family residence'';
(3) in subsection (i)(1)(C), by striking ``limitations''
and inserting ``limitation''; and
(4) by adding at the end the following new subsection:
``(o) Authority To Insure Home Purchase Mortgage.--
``(1) In general.--Notwithstanding any other provision of
this section, the Secretary may insure, upon application by a
mortgagee, a home equity conversion mortgage upon such terms
and conditions as the Secretary may prescribe, when the home
equity conversion mortgage will be used to purchase a 1- to
4-family dwelling unit, one unit of which that the mortgagor
will occupy as a primary residence, and to provide for any
future payments to the mortgagor, based on available equity,
as authorized under subsection (d)(9).
``(2) Limitation on principal obligation.--A home equity
conversion mortgage insured pursuant to paragraph (1) shall
involve a principal obligation that does not exceed the
dollar amount limitation determined under section 305(a)(2)
of the Federal Home Loan Mortgage Corporation Act for a 1-
family residence.''.
(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 following new
subsection:
``(k) Limitation on Origination Fees.--The Secretary shall
establish limits on the origination fee that may be charged
to a mortgagor under a mortgage insured under this section,
which limitations shall--
``(1) equal 1.5 percent of the maximum claim amount of the
mortgage unless adjusted thereafter on the basis of--
``(A) the costs to the mortgagor; and
``(B) the impact of such fees 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; and
``(5) have the same effective date as subsection (o)(2)
regarding the limitation on principal obligation.''.
(d) Study Regarding Program Costs and Credit
Availability.--
(1) In general.--The Comptroller General of the United
States shall conduct a study regarding the costs and
availability of credit under the home equity conversion
mortgages for elderly homeowners program under section 255 of
the National Housing Act (12 U.S.C. 1715z-20) (in this
subsection referred to as the ``program'').
(2) Purpose.--The purpose of the study required under
paragraph (1) is to help Congress analyze and determine the
effects of limiting the amounts of the costs or fees under
the program from the amounts charged under the program as of
the date of the enactment of this title.
(3) Content of report.--The study required under paragraph
(1) should focus on--
(A) the cost to mortgagors of participating in the program;
(B) the financial soundness of the program;
(C) the availability of credit under the program; and
(D) the costs to elderly homeowners participating in the
program, including--
(i) mortgage insurance premiums charged under the program;
(ii) up-front fees charged under the program; and
(iii) margin rates charged under the program.
(4) Timing of report.--Not later than 12 months after the
date of the enactment of this title, the Comptroller General
shall submit a report to the Committee on Banking, Housing,
and Urban Affairs of the Senate and the Committee on
Financial Services of the House of Representatives setting
forth the results and conclusions of the study required under
paragraph (1).

SEC. 123. ENERGY EFFICIENT MORTGAGES PROGRAM.

Section 106(a)(2) of the Energy Policy Act of 1992 (42
U.S.C. 12712 note) is amended--
(1) by amending subparagraph (C) to read as follows:
``(C) Costs of improvements.--The cost of cost-effective
energy efficiency improvements shall not exceed the greater
of--
``(i) 5 percent of the property value (not to exceed 5
percent of the limit established under section 203(b)(2)(A))
of the National Housing Act (12 U.S.C. 1709(b)(2)(A); or
``(ii) 2 percent of the limit established under section
203(b)(2)(B) of such Act.''; and
(2) by adding at the end the following:
``(D) Limitation.--In any fiscal year, the aggregate number
of mortgages insured pursuant to this section may not exceed
5 percent of the aggregate number of mortgages for 1- to 4-
family residences insured by the Secretary of Housing and
Urban Development under title II of the National Housing Act
(12 U.S.C. 1707 et seq.) during the preceding fiscal year.''.

SEC. 124. PILOT PROGRAM FOR AUTOMATED PROCESS FOR BORROWERS
WITHOUT SUFFICIENT CREDIT HISTORY.

(a) Establishment.--Title II of the National Housing Act
(12 U.S.C. 1707 et seq.) is amended by adding at the end the
following new section:

``SEC. 257. PILOT PROGRAM FOR AUTOMATED PROCESS FOR BORROWERS
WITHOUT SUFFICIENT CREDIT HISTORY.

``(a) Establishment.--The Secretary shall carry out a pilot
program to establish, and make available to mortgagees, an
automated process for providing alternative credit rating
information for mortgagors and prospective mortgagors under
mortgages on 1- to 4-family residences to be insured under
this title who have insufficient credit histories for
determining their creditworthiness. Such alternative credit
rating information may include rent, utilities, and insurance
payment histories, and such other information as the
Secretary considers appropriate.
``(b) Scope.--The Secretary may carry out the pilot program
under this section on a limited basis or scope, and may
consider limiting the program to first-time homebuyers.
``(c) Limitation.--In any fiscal year, the aggregate number
of mortgages insured pursuant to the automated process
established under this section may not exceed 5 percent of
the aggregate number of mortgages for 1- to 4-family
residences insured by the Secretary under this title during
the preceding fiscal year.
``(d) Sunset.--After the expiration of the 5-year period
beginning on the date of the enactment of the Building
American Homeownership Act of 2008, the Secretary may not
enter into any new commitment to insure any mortgage, or
newly insure any mortgage, pursuant to the automated process
established under this section.''.
(b) GAO Report.--Not later than the expiration of the two-
year period beginning on the date of the enactment of this
subtitle, the Comptroller General of the United States shall
submit to the Congress a report identifying the number of
additional mortgagors served using the automated process
established pursuant to section 257 of the National Housing
Act (as added by the amendment made by subsection (a) of this
section) and the impact of such process and the insurance of
mortgages pursuant to such process on the safety and
soundness of the insurance funds under the National Housing
Act of which such mortgages are obligations.

SEC. 125. HOMEOWNERSHIP PRESERVATION.

The Secretary of Housing and Urban Development and the
Commissioner of the Federal Housing Administration, in
consultation with industry, the Neighborhood Reinvestment
Corporation, and other entities involved in foreclosure
prevention activities, shall--
(1) develop and implement a plan to improve the Federal
Housing Administration's loss mitigation process; and
(2) report such plan to the Committee on Banking, Housing,
and Urban Affairs of the Senate and the Committee on
Financial Services of the House of Representatives.

SEC. 126. USE OF FHA SAVINGS FOR IMPROVEMENTS IN FHA
TECHNOLOGIES, PROCEDURES, PROCESSES, PROGRAM
PERFORMANCE, STAFFING, AND SALARIES.

(a) Authorization of Appropriations.--There is authorized
to be appropriated for each of fiscal years 2009 through
2013, $25,000,000, from negative credit subsidy for the
mortgage insurance programs under title II of the National
Housing Act, to the Secretary of Housing and Urban
Development for increasing funding for the purpose of
improving technology, processes, program performance,
eliminating fraud, and for providing appropriate staffing in
connection with the mortgage insurance programs under title
II of the National Housing Act.
(b) Certification.--The authorization under subsection (a)
shall not be effective for a fiscal year unless the Secretary
of Housing and Urban Development has, by rulemaking

[[Page S2490]]

in accordance with section 553 of title 5, United States Code
(notwithstanding subsections (a)(2), (b)(B), and (d)(3) of
such section), made a determination that--
(1) 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 minimum amount sufficient
to--
(A) comply with the requirements of section 205(f) of such
Act (relating to required capital ratio for the Mutual
Mortgage Insurance Fund); and
(B) ensure the safety and soundness of the other mortgage
insurance funds under such Act; and
(2) any negative credit subsidy for such fiscal year
resulting from such mortgage insurance programs adequately
ensures the efficient delivery and availability of such
programs.
(c) Study and Report.--The Secretary of Housing and Urban
Development shall conduct a study to obtain recommendations
from participants in the private residential (both single
family and multifamily) mortgage lending business and the
secondary market for such mortgages on how best to update and
upgrade processes and technologies for the mortgage insurance
programs under title II of the National Housing Act so that
the procedures for originating, insuring, and servicing of
such mortgages conform with those customarily used by
secondary market purchasers of residential mortgage loans.
Not later than the expiration of the 12-month period
beginning on the date of the enactment of this title, the
Secretary shall submit a report to the Congress describing
the progress made and to be made toward updating and
upgrading such processes and technology, and providing
appropriate staffing for such mortgage insurance programs.

SEC. 127. POST-PURCHASE HOUSING COUNSELING ELIGIBILITY
IMPROVEMENTS.

Section 106(c)(4) of the Housing and Urban Development Act
of 1968 (12 U.S.C. 1701x(c)(4)) is amended:
(1) in subparagraph (C)--
(A) in clause (i), by striking ``; or'' and inserting a
semicolon;
(B) in clause (ii), by striking the period at the end and
inserting a semicolon; and
(C) by adding at the end the following:
``(iii) a significant reduction in the income of the
household due to divorce or death; or
``(iv) a significant increase in basic expenses of the
homeowner or an immediate family member of the homeowner
(including the spouse, child, or parent for whom the
homeowner provides substantial care or financial assistance)
due to--

``(I) an unexpected or significant increase in medical
expenses;
``(II) a divorce;
``(III) unexpected and significant damage to the property,
the repair of which will not be covered by private or public
insurance; or
``(IV) a large property-tax increase; or'';

(2) by striking the matter that follows subparagraph (C);
and
(3) by adding at the end the following:
``(D) the Secretary of Housing and Urban Development
determines that the annual income of the homeowner is no
greater than the annual income established by the Secretary
as being of low- or moderate-income.''.

SEC. 128. PRE-PURCHASE HOMEOWNERSHIP COUNSELING
DEMONSTRATION.

(a) Establishment of Program.--For the period beginning on
the date of enactment of this title and ending on the date
that is 3 years after such date of enactment, the Secretary
of Housing and Urban Development shall establish and conduct
a demonstration program to test the effectiveness of
alternative forms of pre-purchase homeownership counseling
for eligible homebuyers.
(b) Forms of Counseling.--The Secretary of Housing and
Urban Development shall provide to eligible homebuyers pre-
purchase homeownership counseling under this section in the
form of--
(1) telephone counseling;
(2) individualized in-person counseling;
(3) web-based counseling;
(4) counseling classes; or
(5) any other form or type of counseling that the Secretary
may, in his discretion, determine appropriate.
(c) Size of Program.--The Secretary shall make available
the pre-purchase homeownership counseling described in
subsection (b) to not more than 3,000 eligible homebuyers in
any given year.
(d) Incentive to Participate.--The Secretary of Housing and
Urban Development may provide incentives to eligible
homebuyers to participate in the demonstration program
established under subsection (a). Such incentives may include
the reduction of any insurance premium charges owed by the
eligible homebuyer to the Secretary.
(e) Eligible Homebuyer Defined.--For purposes of this
section an ``eligible homebuyer'' means a first-time
homebuyer who has been approved for a home loan with a loan-
to-value ratio between 97 percent and 98.5 percent.
(f) Report to Congress.--The Secretary of Housing and Urban
Development shall report to the Committee on Banking,
Housing, and Urban Affairs of the Senate and the Committee on
Financial Services of the House of Representative--
(1) on an annual basis, on the progress and results of the
demonstration program established under subsection (a); and
(2) for the period beginning on the date of enactment of
this title and ending on the date that is 5 years after such
date of enactment, on the payment history and delinquency
rates of eligible homebuyers who participated in the
demonstration program.

SEC. 129. FRAUD PREVENTION.

Section 1014 of title 18, United States Code, is amended in
the first sentence--
(1) by inserting ``the Federal Housing Administration''
before ``the Farm Credit Administration''; and
(2) by striking ``commitment, or loan'' and inserting
``commitment, loan, or insurance agreement or application for
insurance or a guarantee''.

SEC. 130. LIMITATION ON MORTGAGE INSURANCE PREMIUM INCREASES.

(a) In General.--Notwithstanding any other provision of
law, including any provision of this title and any amendment
made by this title--
(1) for the period beginning on the date of the enactment
of this title and ending on October 1, 2009, the premiums
charged for mortgage insurance under multifamily housing
programs under the National Housing Act may not be increased
above the premium amounts in effect under such program on
October 1, 2006, unless 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 if not less than 30 days prior to such increase
taking effect, the Secretary of Housing and Urban
Development--
(A) notifies the Committee on Banking, Housing, and Urban
Affairs of the Senate and the Committee on Financial Services
of the House of Representatives of such increase; and
(B) publishes notice of such increase in the Federal
Register.
(b) Waiver.--The Secretary of Housing and Urban Development
may waive the 30-day notice requirement under subsection
(a)(2), if the Secretary determines that waiting 30-days
before increasing premiums would cause substantial damage to
the solvency of multifamily housing programs under the
National Housing Act.

SEC. 131. SAVINGS PROVISION.

Any mortgage insured under title II of the National Housing
Act before the date of enactment of this subtitle 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 subtitle.

SEC. 132. IMPLEMENTATION.

The Secretary of Housing and Urban Development shall by
notice establish any additional requirements that may be
necessary to immediately carry out the provisions of this
subtitle. The notice shall take effect upon issuance.

SEC. 133. MORATORIUM ON IMPLEMENTATION OF RISK-BASED
PREMIUMS.

For the 12-month period beginning on the date of enactment
of this title, the Secretary of Housing and Urban Development
shall not enact, execute, or take any action to make
effective the planned implementation of risk-based premiums,
which are designed for mortgage lenders to offer borrowers an
FHA-insured product that provides a range of mortgage
insurance premium pricing, based on the risk the insurance
contract represents, as such planned implementation was set
forth in the Notice published in the Federal Register on
September 20, 2007 (Vol. 72, No. 182, Page 53872).

Subtitle B--Manufactured Housing Loan Modernization

SEC. 141. SHORT TITLE.

This subtitle may be cited as the ``FHA Manufactured
Housing Loan Modernization Act of 2008''.

SEC. 142. PURPOSES.

The purposes of this subtitle are--
(1) to provide adequate funding for FHA-insured
manufactured housing loans for low- and moderate-income
homebuyers during all economic cycles in the manufactured
housing industry;
(2) to modernize the FHA title I insurance program for
manufactured housing loans to enhance participation by Ginnie
Mae and the private lending markets; and
(3) to adjust the low loan limits for title I manufactured
home loan insurance to reflect the increase in costs since
such limits were last increased in 1992 and to index the
limits to inflation.

SEC. 143. EXCEPTION TO LIMITATION ON FINANCIAL INSTITUTION
PORTFOLIO.

The second sentence of section 2(a) of the National Housing
Act (12 U.S.C. 1703(a)) is amended--
(1) by striking ``In no case'' and inserting ``Other than
in connection with a manufactured home or a lot on which to
place such a home (or both), in no case''; and
(2) by striking ``: Provided, That with'' and inserting ``.
With''.

SEC. 144. INSURANCE BENEFITS.

(a) In General.--Subsection (b) of section 2 of the
National Housing Act (12 U.S.C. 1703(b)), is amended by
adding at the end the following new paragraph:
``(8) Insurance benefits for manufactured housing loans.--
Any contract of insurance with respect to loans, advances of

[[Page S2491]]

credit, or purchases in connection with a manufactured home
or a lot on which to place a manufactured home (or both) for
a financial institution that is executed under this title
after the date of the enactment of the FHA Manufactured
Housing Loan Modernization Act of 2008 by the Secretary shall
be conclusive evidence of the eligibility of such financial
institution for insurance, and the validity of any contract
of insurance so executed shall be incontestable in the hands
of the bearer from the date of the execution of such
contract, except for fraud or misrepresentation on the part
of such institution.''.
(b) Applicability.--The amendment made by subsection (a)
shall only apply to loans that are registered or endorsed for
insurance after the date of the enactment of this title.

SEC. 145. MAXIMUM LOAN LIMITS.

(a) Dollar Amounts.--Paragraph (1) of section 2(b) of the
National Housing Act (12 U.S.C. 1703(b)(1)) is amended--
(1) in clause (ii) of subparagraph (A), by striking
``$17,500'' and inserting ``$25,090'';
(2) in subparagraph (C) by striking ``$48,600'' and
inserting ``$69,678'';
(3) in subparagraph (D) by striking ``$64,800'' and
inserting ``$92,904'';
(4) in subparagraph (E) by striking ``$16,200'' and
inserting ``$23,226''; and
(5) by realigning subparagraphs (C), (D), and (E) 2 ems to
the left so that the left margins of such subparagraphs are
aligned with the margins of subparagraphs (A) and (B).
(b) Annual Indexing.--Subsection (b) of section 2 of the
National Housing Act (12 U.S.C. 1703(b)), as amended by the
preceding provisions of this title, is further amended by
adding at the end the following new paragraph:
``(9) Annual indexing of manufactured housing loans.--The
Secretary shall develop a method of indexing in order to
annually adjust the loan limits established in subparagraphs
(A)(ii), (C), (D), and (E) of this subsection. Such index
shall be based on the manufactured housing price data
collected by the United States Census Bureau. The Secretary
shall establish such index no later than 1 year after the
date of the enactment of the FHA Manufactured Housing Loan
Modernization Act of 2008.''
(c) Technical and Conforming Changes.--Paragraph (1) of
section 2(b) of the National Housing Act (12 U.S.C.
1703(b)(1)) is amended--
(1) by striking ``No'' and inserting ``Except as provided
in the last sentence of this paragraph, no''; and
(2) by adding after and below subparagraph (G) the
following:
``The Secretary shall, by regulation, annually increase the
dollar amount limitations in subparagraphs (A)(ii), (C), (D),
and (E) (as such limitations may have been previously
adjusted under this sentence) in accordance with the index
established pursuant to paragraph (9).''.

SEC. 146. INSURANCE PREMIUMS.

Subsection (f) of section 2 of the National Housing Act (12
U.S.C. 1703(f)) is amended--
(1) by inserting ``(1) Premium charges.--'' after ``(f)'';
and
(2) by adding at the end the following new paragraph:
``(2) Manufactured Home Loans.--Notwithstanding paragraph
(1), in the case of a loan, advance of credit, or purchase in
connection with a manufactured home or a lot on which to
place such a home (or both), the premium charge for the
insurance granted under this section shall be paid by the
borrower under the loan or advance of credit, as follows:
``(A) At the time of the making of the loan, advance of
credit, or purchase, a single premium payment in an amount
not to exceed 2.25 percent of the amount of the original
insured principal obligation.
``(B) In addition to the premium under subparagraph (A),
annual premium payments during the term of the loan, advance,
or obligation purchased in an amount not exceeding 1.0
percent of the remaining insured principal balance (excluding
the portion of the remaining balance attributable to the
premium collected under subparagraph (A) and without taking
into account delinquent payments or prepayments).
``(C) Premium charges under this paragraph shall be
established in amounts that are sufficient, but do not exceed
the minimum amounts necessary, to maintain a negative credit
subsidy for the program under this section for insurance of
loans, advances of credit, or purchases in connection with a
manufactured home or a lot on which to place such a home (or
both), as determined based upon risk to the Federal
Government under existing underwriting requirements.
``(D) The Secretary may increase the limitations on premium
payments to percentages above those set forth in
subparagraphs (A) and (B), but only if necessary, and not in
excess of the minimum increase necessary, to maintain a
negative credit subsidy as described in subparagraph (C).''.

SEC. 147. TECHNICAL CORRECTIONS.

(a) Dates.--Subsection (a) of section 2 of the National
Housing Act (12 U.S.C. 1703(a)) is amended--
(1) by striking ``on and after July 1, 1939,'' each place
such term appears; and
(2) by striking ``made after the effective date of the
Housing Act of 1954''.
(b) Authority of Secretary.--Subsection (c) of section 2 of
the National Housing Act (12 U.S.C. 1703(c)) is amended to
read as follows:
``(c) Handling and Disposal of Property.--
``(1) Authority of secretary.--Notwithstanding any other
provision of law, the Secretary may--
``(A) deal with, complete, rent, renovate, modernize,
insure, or assign or sell at public or private sale, or
otherwise dispose of, for cash or credit in the Secretary's
discretion, and upon such terms and conditions and for such
consideration as the Secretary shall determine to be
reasonable, any real or personal property conveyed to or
otherwise acquired by the Secretary, in connection with the
payment of insurance heretofore or hereafter granted under
this title, including any evidence of debt, contract, claim,
personal property, or security assigned to or held by him in
connection with the payment of insurance heretofore or
hereafter granted under this section; and
``(B) pursue to final collection, by way of compromise or
otherwise, all claims assigned to or held by the Secretary
and all legal or equitable rights accruing to the Secretary
in connection with the payment of such insurance, including
unpaid insurance premiums owed in connection with insurance
made available by this title.
``(2) Advertisements for proposals.--Section 3709 of the
Revised Statutes shall not be construed to apply to any
contract of hazard insurance or to any purchase or contract
for services or supplies on account of such property if the
amount thereof does not exceed $25,000.
``(3) Delegation of authority.--The power to convey and to
execute in the name of the Secretary, deeds of conveyance,
deeds of release, assignments and satisfactions of mortgages,
and any other written instrument relating to real or personal
property or any interest therein heretofore or hereafter
acquired by the Secretary pursuant to the provisions of this
title may be exercised by an officer appointed by the
Secretary without the execution of any express delegation of
power or power of attorney. Nothing in this subsection shall
be construed to prevent the Secretary from delegating such
power by order or by power of attorney, in the Secretary's
discretion, to any officer or agent the Secretary may
appoint.''.

SEC. 148. REVISION OF UNDERWRITING CRITERIA.

(a) In General.--Subsection (b) of section 2 of the
National Housing Act (12 U.S.C. 1703(b)), as amended by the
preceding provisions of this title, is further amended by
adding at the end the following new paragraph:
``(10) Financial soundness of manufactured housing
program.--The Secretary shall establish such underwriting
criteria for loans and advances of credit in connection with
a manufactured home or a lot on which to place a manufactured
home (or both), including such loans and advances represented
by obligations purchased by financial institutions, as may be
necessary to ensure that the program under this title for
insurance for financial institutions against losses from such
loans, advances of credit, and purchases is financially
sound.''.
(b) Timing.--Not later than the expiration of the 6-month
period beginning on the date of the enactment of this title,
the Secretary of Housing and Urban Development shall revise
the existing underwriting criteria for the program referred
to in paragraph (10) of section 2(b) of the National Housing
Act (as added by subsection (a) of this section) in
accordance with the requirements of such paragraph.

SEC. 149. PROHIBITION AGAINST KICKBACKS AND UNEARNED FEES.

Title I of the National Housing Act is amended by adding at
the end of section 9 the following new section:

``SEC. 10. PROHIBITION AGAINST KICKBACKS AND UNEARNED FEES.

``(a) In General.--Except as provided in subsection (b),
the provisions of sections 3, 8, 16, 17, 18, and 19 of the
Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2601
et seq.) shall apply to each sale of a manufactured home
financed with an FHA-insured loan or extension of credit, as
well as to services rendered in connection with such
transactions.
``(b) Authority of the Secretary.--The Secretary is
authorized to determine the manner and extent to which the
provisions of sections 3, 8, 16, 17, 18, and 19 of the Real
Estate Settlement Procedures Act of 1974 (12 U.S.C. 2601 et
seq.) may reasonably be applied to the transactions described
in subsection (a), and to grant such exemptions as may be
necessary to achieve the purposes of this section.
``(c) Definitions.--For purposes of this section--
``(1) the term `federally related mortgage loan' as used in
sections 3, 8, 16, 17, 18, and 19 of the Real Estate
Settlement Procedures Act of 1974 (12 U.S.C. 2601 et seq.)
shall include an FHA-insured loan or extension of credit made
to a borrower for the purpose of purchasing a manufactured
home that the borrower intends to occupy as a personal
residence; and
``(2) the term `real estate settlement service' as used in
sections 3, 8, 16, 17, 18, and 19 of the Real Estate
Settlement Procedures Act of 1974 (12 U.S.C. 2601 et seq.)
shall include any service rendered in connection with a loan
or extension of credit insured by the Federal Housing
Administration for the purchase of a manufactured home.
``(d) Unfair and Deceptive Practices.--In connection with
the purchase of a manufactured home financed with a loan or
extension

[[Page S2492]]

of credit insured by the Federal Housing Administration under
this title, the Secretary shall prohibit acts or practices in
connection with loans or extensions of credit that the
Secretary finds to be unfair, deceptive, or otherwise not in
the interests of the borrower.''.

SEC. 150. LEASEHOLD REQUIREMENTS.

Subsection (b) of section 2 of the National Housing Act (12
U.S.C. 1703(b)), as amended by the preceding provisions of
this title, is further amended by adding at the end the
following new paragraph:
``(11) Leasehold requirements.--No insurance shall be
granted under this section to any such financial institution
with respect to any obligation representing any such loan,
advance of credit, or purchase by it, made for the purposes
of financing a manufactured home which is intended to be
situated in a manufactured home community pursuant to a
lease, unless such lease--
``(A) expires not less than 3 years after the origination
date of the obligation;
``(B) is renewable upon the expiration of the original 3
year term by successive 1 year terms; and
``(C) requires the lessor to provide the lessee written
notice of termination of the lease not less than 180 days
prior to the expiration of the current lease term in the
event the lessee is required to move due to the closing of
the manufactured home community, and further provides that
failure to provide such notice to the mortgagor in a timely
manner will cause the lease term, at its expiration, to
automatically renew for an additional 1 year term.''.

TITLE II--MORTGAGE FORECLOSURE PROTECTIONS FOR SERVICEMEMBERS

SEC. 201. TEMPORARY INCREASE IN MAXIMUM LOAN GUARANTY AMOUNT
FOR CERTAIN HOUSING LOANS GUARANTEED BY THE
SECRETARY OF VETERANS AFFAIRS.

Notwithstanding subparagraph (C) of section 3703(a)(1) of
title 38, United States Code, for purposes of any loan
described in subparagraph (A)(i)(IV) of such section that is
originated during the period beginning on the date of the
enactment of this Act and ending on December 31, 2008, the
term ``maximum guaranty amount'' shall mean an amount equal
to 25 percent of the higher of--
(1) the limitation determined under section 305(a)(2) of
the Federal Home Loan Mortgage Corporation Act (12 U.S.C.
1454(a)(2)) for the calendar year in which the loan is
originated for a single-family residence; or
(2) 125 percent of the area median price for a single-
family residence, but in no case to exceed 175 percent of the
limitation determined under such section 305(a)(2) for the
calendar year in which the loan is originated for a single-
family residence.

SEC. 202. COUNSELING ON MORTGAGE FORECLOSURES FOR MEMBERS OF
THE ARMED FORCES RETURNING FROM SERVICE ABROAD.

(a) In General.--The Secretary of Defense shall develop and
implement a program to advise members of the Armed Forces
(including members of the National Guard and Reserve) who are
returning from service on active duty abroad (including
service in Operation Iraqi Freedom and Operation Enduring
Freedom) on actions to be taken by such members to prevent or
forestall mortgage foreclosures.
(b) Elements.--The program required by subsection (a) shall
include the following:
(1) Credit counseling.
(2) Home mortgage counseling.
(3) Such other counseling and information as the Secretary
considers appropriate for purposes of the program.
(c) Timing of Provision of Counseling.--Counseling and
other information under the program required by subsection
(a) shall be provided to a member of the Armed Forces covered
by the program as soon as practicable after the return of the
member from service as described in subsection (a).

SEC. 203. ENHANCEMENT OF PROTECTIONS FOR SERVICEMEMBERS
RELATING TO MORTGAGES AND MORTGAGE
FORECLOSURES.

(a) Extension of Period of Protections Against Mortgage
Foreclosures.--
(1) Extension of protection period.--Subsection (c) of
section 303 of the Servicemembers Civil Relief Act (50 U.S.C.
App. 533) is amended by striking ``90 days'' and inserting
``9 months''.
(2) Extension of stay of proceedings period.--Subsection
(b) of such section is amended by striking ``90 days'' and
inserting ``9 months''.
(b) Treatment of Mortgages as Obligations Subject to
Interest Rate Limitation.--Section 207 of the Servicemembers
Civil Relief Act (50 U.S.C. App. 527) is amended--
(1) in subsection (a)(1), by striking ``in excess of 6
percent'' and all that follows and inserting ``in excess of 6
percent--
``(A) during the period of military service and one year
thereafter, in the case of an obligation or liability
consisting of a mortgage, trust deed, or other security in
the nature of a mortgage; or
``(B) during the period of military service, in the case of
any other obligation or liability.''; and
(2) by striking subsection (d) and inserting the following
new subsection:
``(d) Definitions.--In this section:
``(1) Interest.--The term `interest' includes service
charges, renewal charges, fees, or any other charges (except
bona fide insurance) with respect to an obligation or
liability.
``(2) Obligation or liability.--The term `obligation or
liability' includes an obligation or liability consisting of
a mortgage, trust deed, or other security in the nature of a
mortgage.''.
(c) Effective Date; Sunset.--
(1) Effective date.--The amendment made by subsection (a)
shall take effect on the date of the enactment of this Act.
(2) Sunset.--The amendments made by subsection (a) shall
expire on December 31, 2010. Effective January 1, 2011, the
provisions of subsections (b) and (c) of section 303 of the
Servicemembers Civil Relief Act, as in effect on the day
before the date of the enactment of this Act, are hereby
revived.

TITLE III--EMERGENCY ASSISTANCE FOR THE REDEVELOPMENT OF ABANDONED AND
FORECLOSED HOMES

SEC. 301. EMERGENCY ASSISTANCE FOR THE REDEVELOPMENT OF
ABANDONED AND FORECLOSED HOMES.

(a) Direct Appropriations.--There are appropriated out of
any money in the Treasury not otherwise appropriated for the
fiscal year 2008, $4,000,000,000, to remain available until
expended, for assistance to States and units of general local
government (as such terms are defined in section 102 of the
Housing and Community Development Act of 1974 (42 U.S.C.
5302)) for the redevelopment of abandoned and foreclosed upon
homes and residential properties.
(b) Allocation of Appropriated Amounts.--
(1) In general.--The amounts appropriated or otherwise made
available to States and units of general local government
under this section shall be allocated based on a funding
formula established by the Secretary of Housing and Urban
Development (in this title referred to as the ``Secretary'').
(2) Formula to be devised swiftly.--The funding formula
required under paragraph (1) shall be established not later
than 60 days after the date of enactment of this section.
(3) Criteria.--The funding formula required under paragraph
(1) shall ensure that any amounts appropriated or otherwise
made available under this section are allocated to States and
units of general local government with the greatest need, as
such need is determined in the discretion of the Secretary
based on--
(A) the number and percentage of home foreclosures in each
State or unit of general local government;
(B) the number and percentage of homes financed by a
subprime mortgage related loan in each State or unit of
general local government; and
(C) the number and percentage of homes in default or
delinquency in each State or unit of general local
government.
(4) Distribution.--Amounts appropriated or otherwise made
available under this section shall be distributed according
to the funding formula established by the Secretary under
paragraph (1) not later than 30 days after the establishment
of such formula.
(c) Use of Funds.--
(1) In general.--Any State or unit of general local
government that receives amounts pursuant to this section
shall, not later than 18 months after the receipt of such
amounts, use such amounts to purchase and redevelop abandoned
and foreclosed homes and residential properties.
(2) Priority.--Any State or unit of general local
government that receives amounts pursuant to this section
shall in distributing such amounts give priority emphasis and
consideration to those metropolitan areas, metropolitan
cities, urban areas, rural areas, low- and moderate-income
areas, and other areas with the greatest need, including
those--
(A) with the greatest percentage of home foreclosures;
(B) with the highest percentage of homes financed by a
subprime mortgage related loan; and
(C) identified by the State or unit of general local
government as likely to face a significant rise in the rate
of home foreclosures.
(3) Eligible uses.--Amounts made available under this
section may be used to--
(A) establish financing mechanisms for purchase and
redevelopment of foreclosed upon homes and residential
properties, including such mechanisms as soft-seconds, loan
loss reserves, and shared-equity loans for low- and moderate-
income homebuyers;
(B) purchase and rehabilitate homes and residential
properties that have been abandoned or foreclosed upon, in
order to sell, rent, or redevelop such homes and properties;
(C) establish land banks for homes that have been
foreclosed upon; and
(D) demolish blighted structures.
(d) Limitations.--
(1) On purchases.--Any purchase of a foreclosed upon home
or residential property under this section shall be at a
discount from the current market appraised value of the home
or property, taking into account its current condition, and
such discount shall ensure that purchasers are paying below-
market value for the home or property.
(2) Sale of homes.--If an abandoned or foreclosed upon home
or residential property is purchased, redeveloped, or
otherwise sold to an individual as a primary residence, then
such sale shall be in an amount equal to or less than the
cost to acquire and redevelop or rehabilitate such home or
property up to a decent, safe, and habitable condition.
(3) Reinvestment of profits.--
(A) Revenues generated from sales.--Any revenue generated
from the sale, rental,

[[Page S2493]]

redevelopment, rehabilitation, or any other eligible use that
is in excess of the cost to acquire and redevelop (including
reasonable development fees) or rehabilitate an abandoned or
foreclosed upon home or residential property shall be
provided to and used by the State or unit of general local
government in accordance with, and in furtherance of, the
intent and provisions of this section.
(B) Other revenues.--Any revenue generated under
subparagraphs (A), (C) or (D) of subsection (c)(3) shall be
provided to and used by the State or unit of general local
government in accordance with, and in furtherance of, the
intent and provisions of this section.
(e) Rules of Construction.--
(1) In general.--Except as otherwise provided by this
section, amounts appropriated, revenues generated, or amounts
otherwise made available to States and units of general local
government under this section shall be treated as though such
funds were community development block grant funds under
title I of the Housing and Community Development Act of 1974
(42 U.S.C. 5301 et seq.).
(2) No match.--No matching funds shall be required in order
for a State or unit of general local government to receive
any amounts under this section.
(f) Authority to Specify Alternative Requirements.--
(1) In general.--In administering any amounts appropriated
or otherwise made available under this section, the Secretary
may specify alternative requirements to any provision under
title I of the Housing and Community Development Act of 1974
(except for those related to fair housing, nondiscrimination,
labor standards, and the environment) in accordance with the
terms of this section and for the sole purpose of expediting
the use of such funds.
(2) Notice.--The Secretary shall provide written notice of
its intent to exercise the authority to specify alternative
requirements under paragraph (1) to the Committee on Banking,
Housing and Urban Affairs of the Senate and the Committee on
Financial Services of the House of Representatives not later
than 10 business days before such exercise of authority is to
occur.
(3) Low and moderate income requirement.--
(A) In general.--Notwithstanding the authority of the
Secretary under paragraph (1)--
(i) all of the funds appropriated or otherwise made
available under this section shall be used with respect to
individuals and families whose income does not exceed 120
percent of area median income; and
(ii) not less than 25 percent of the funds appropriated or
otherwise made available under this section shall be used for
the purchase and redevelopment of abandoned or foreclosed
upon homes or residential properties that will be used to
house individuals or families whose incomes do not exceed 50
percent of area median income.
(B) Recurrent requirement.--The Secretary shall, by rule or
order, ensure, to the maximum extent practicable and for the
longest feasible term, that the sale, rental, or
redevelopment of abandoned and foreclosed upon homes and
residential properties under this section remain affordable
to individuals or families described in subparagraph (A).
(g) Periodic Audits.--In consultation with the Secretary of
Housing and Urban Development, the Comptroller General of the
United States shall conduct periodic audits to ensure that
funds appropriated, made available, or otherwise distributed
under this section are being used in a manner consistent with
the criteria provided in this section.

TITLE IV--HOUSING COUNSELING RESOURCES

SEC. 401. HOUSING COUNSELING RESOURCES.

There are appropriated out of any money in the Treasury not
otherwise appropriated for the fiscal year 2008, for an
additional amount for the ``Neighborhood Reinvestment
Corporation--Payment to the Neighborhood Reinvestment
Corporation'' $100,000,000, to remain available until
September 30, 2008, for foreclosure mitigation activities
under the terms and conditions contained in the second
undesignated paragraph (beginning with the phrase ``For an
additional amount'') under the heading ``Neighborhood
Reinvestment Corporation--Payment to the Neighborhood
Reinvestment Corporation'' of Public Law 110-161.

TITLE V--MORTGAGE DISCLOSURE IMPROVEMENT ACT

SEC. 501. SHORT TITLE.

This title may be cited as the ``Mortgage Disclosure
Improvement Act of 2008''.

SEC. 502. ENHANCED MORTGAGE LOAN DISCLOSURES.

(a) Truth in Lending Act Disclosures.--Section 128(b)(2) of
the Truth in Lending Act (15 U.S.C. 1638(b)(2)) is amended--
(1) by inserting ``(A)'' before ``In the'';
(2) by striking ``a residential mortgage transaction, as
defined in section 103(w)'' and inserting ``any extension of
credit that is secured by the dwelling of a consumer'';
(3) by striking ``shall be made in accordance'' and all
that follows through ``extended, or''; and
(4) by striking ``If the'' and all that follows through the
end of the paragraph and inserting the following:
``(B) In the case of an extension of credit that is secured
by the dwelling of a consumer, in addition to the other
disclosures required by subsection (a), the disclosures
provided under this paragraph shall--
``(i) state in conspicuous type size and format, the
following: `You are not required to complete this agreement
merely because you have received these disclosures or signed
a loan application.'; and
``(ii) be furnished to the borrower not later than 7
business days before the date of consummation of the
transaction, and at the time of consummation of the
transaction, subject to subparagraph (D).
``(C) In the case of an extension of credit that is secured
by the dwelling of a consumer, under which the annual rate of
interest is variable, or with respect to which the regular
payments may otherwise be variable, in addition to the other
disclosures required by subsection (a), the disclosures
provided under this paragraph shall do the following:
``(i) Label the payment schedule as follows: `Payment
Schedule: Payments Will Vary Based on Interest Rate Changes'.
``(ii) State in conspicuous type size and format examples
of adjustments to the regular required payment on the
extension of credit based on the change in the interest rates
specified by the contract for such extension of credit. Among
the examples required to be provided under this clause is an
example that reflects the maximum payment amount of the
regular required payments on the extension of credit, based
on the maximum interest rate allowed under the contract, in
accordance with the rules of the Board. Prior to issuing any
rules pursuant to this clause, the Board shall conduct
consumer testing to determine the appropriate format for
providing the disclosures required under this subparagraph to
consumers so that such disclosures can be easily understood.
``(D) In any case in which the disclosure statement
provided 7 business days before the date of consummation of
the transaction contains an annual percentage rate of
interest that is no longer accurate, as determined under
section 107(c), the creditor shall furnish an additional,
corrected statement to the borrower, not later than 3
business days before the date of consummation of the
transaction. A consumer may modify or waive receipt of the
additional, corrected statement 3 business days before the
date of consummation of the transaction in order to meet a
bona fide personal financial emergency, only if the consumer
provides the creditor a dated, written statement that--
``(i) describes the emergency;
``(ii) specifically modifies or waives the right; and
``(iii) bears the signature of all the consumers entitled
to receive the disclosure.
``(E) The consumer shall receive the disclosures required
under this subsection before paying any fee to the creditor
or other person in connection with the consumer's application
for a residential mortgage transaction. If the disclosures
are mailed to the consumer, the consumer is considered to
have received them 3 business days after they are mailed. A
creditor or other person may impose a fee for obtaining the
consumer's credit report before the consumer has received the
disclosures under this subsection, provided the fee is bona
fide and reasonable in amount.''.
(b) Civil Liability.--Section 130(a) of the Truth in
Lending Act (15 U.S.C. 1640(a)) is amended--
(1) in paragraph (2)(A)(iii), by striking ``not less than
$200 or greater than $2,000'' and inserting ``not less than
$400 or greater than $4,000''; and
(2) in the penultimate sentence of the undesignated matter
following paragraph (4)--
(A) by inserting ``or section 128(b)(2)(C)(ii),''after
``128(a),''; and
(B) by inserting ``or section 128(b)(2)(C)(ii)'' before the
period.

TITLE VI--TAX-RELATED PROVISIONS

SEC. 601. ELECTION FOR 4-YEAR CARRYBACK OF CERTAIN NET
OPERATING LOSSES AND TEMPORARY SUSPENSION OF 90
PERCENT AMT LIMIT.

(a) In General.--
(1) 4-year carryback of certain losses.--Subparagraph (H)
of section 172(b)(1) of the Internal Revenue Code of 1986
(relating to years to which loss may be carried) is amended
to read as follows:
``(H) Additional carryback of certain losses.--
``(i) Taxable years ending during 2001 and 2002.--In the
case of a net operating loss for any taxable year ending
during 2001 or 2002, subparagraph (A)(i) shall be applied by
substituting `5' for `2' and subparagraph (F) shall not
apply.
``(ii) Taxable years ending during 2008 and 2009.--In the
case of a net operating loss with respect to any eligible
taxpayer (within the meaning of section 168(k)(4)) for any
taxable year ending during 2008 or 2009--

``(I) subparagraph (A)(i) shall be applied by substituting
`4' for `2',
``(II) subparagraph (E)(ii) shall be applied by
substituting `3' for `2', and
``(III) subparagraph (F) shall not apply.''.

(2) Temporary suspension of 90 percent limit on certain nol
carrybacks and carryovers.--
(A) In general.--Section 56(d) of the Internal Revenue Code
of 1986 (relating to definition of alternative tax net
operating loss deduction) is amended by adding at the end the
following new paragraph:
``(3) Additional adjustments.--For purposes of paragraph
(1)(A), in the case of an eligible taxpayer (within the
meaning of section 168(k)(4)), the amount described in
subclause (I) of paragraph (1)(A)(ii) shall be increased by
the amount of the net operating

[[Page S2494]]

loss deduction allowable for the taxable year under section
172 attributable to the sum of--
``(A) carrybacks of net operating losses from taxable years
ending during 2008 and 2009, and
``(B) carryovers of net operating losses to taxable years
ending during 2008 or 2009.''.
(B) Conforming amendment.--Subclause (I) of section
56(d)(1)(A)(i) of such Code is amended by inserting ``amount
of such'' before ``deduction described in clause (ii)(I)''.
(3) Effective dates.--
(A) Net operating losses.--The amendments made by paragraph
(1) shall apply to net operating losses arising in taxable
years ending in 2008 or 2009.
(B) Suspension of amt limitation.--The amendments made by
paragraph (2) shall apply to taxable years ending after
December 31, 1997.
(4) Anti-abuse rules.--The Secretary of Treasury or the
Secretary's designee shall prescribe such rules as are
necessary to prevent the abuse of the purposes of the
amendments made by this subsection, including anti-stuffing
rules, anti-churning rules (including rules relating to sale-
leasebacks), and rules similar to the rules under section
1091 of the Internal Revenue Code of 1986 relating to losses
from wash sales.
(b) Election Among Stimulus Incentives.--
(1) In general.--
(A) Bonus depreciation.--Section 168(k) of the Internal
Revenue Code of 1986 (relating to special allowance for
certain property acquired after December 31, 2007, and before
January 1, 2009), as amended by the Economic Stimulus Act of
2008, is amended--
(i) in paragraph (1), by inserting ``placed in service by
an eligible taxpayer'' after ``any qualified property'', and
(ii) by adding at the end the following new paragraph:
``(4) Eligible taxpayer.--
``(A) In general.--At such time and in such manner as the
Secretary shall prescribe, each taxpayer may elect to be an
eligible taxpayer with respect to 1 (and only 1) of the
following:
``(i) This subsection and section 179(b)(7).
``(ii) The application of section 56(d)(1)(A)(ii)(I) and
section 172(b)(1)(H)(ii) in connection with net operating
losses relating to taxable years ending during 2008 and 2009.
``(B) Eligible taxpayer.--For purposes of each of the
provisions described in subparagraph (A), a taxpayer shall
only be treated as an eligible taxpayer with respect to the
provision with respect to which the taxpayer made the
election under subparagraph (A).
``(C) Election irrevocable.--An election under subparagraph
(A) may not be revoked except with the consent of the
Secretary.''.
(B) Effective date.--The amendments made by this paragraph
shall take effect as if included in section 103 of the
Economic Stimulus Act of 2008.
(2) Election for increased expensing.--
(A) In general.--Paragraph (7) of section 179(b) of the
Internal Revenue Code of 1986 (relating to limitations), as
added by the Economic Stimulus Act of 2008, is amended to
read as follows:
``(7) Special rule for eligible taxpayers in 2008.--In the
case of any taxable year of any eligible taxpayer (within the
meaning of section 168(k)(4)) beginning in 2008--
``(A) the dollar limitation under paragraph (1) shall be
$250,000,
``(B) the dollar limitation under paragraph (2) shall be
$800,000, and
``(C) the amounts described in subparagraphs (A) and (B)
shall not be adjusted under paragraph (5).''.
(B) Effective date.--The amendment made by this paragraph
shall take effect as if included in section 102 of the
Economic Stimulus Act of 2008.

SEC. 602. MODIFICATIONS ON USE OF QUALIFIED MORTGAGE BONDS;
TEMPORARY INCREASED VOLUME CAP FOR CERTAIN
HOUSING BONDS.

(a) Use of Qualified Mortgage Bonds Proceeds for Subprime
Refinancing Loans.--Section 143(k) of the Internal Revenue
Code of 1986 (relating to other definitions and special
rules) is amended by adding at the end the following new
paragraph:
``(12) Special rules for subprime refinancings.--
``(A) In general.--Notwithstanding the requirements of
subsection (i)(1), the proceeds of a qualified mortgage issue
may be used to refinance a mortgage on a residence which was
originally financed by the mortgagor through a qualified
subprime loan.
``(B) Special rules.--In applying this paragraph to any
case in which the proceeds of a qualified mortgage issue are
used for any refinancing described in subparagraph (A)--
``(i) subsection (a)(2)(D)(i) (relating to proceeds must be
used within 42 months of date of issuance) shall be applied
by substituting `12-month period' for `42-month period' each
place it appears,
``(ii) subsection (d) (relating to 3-year requirement)
shall not apply, and
``(iii) subsection (e) (relating to purchase price
requirement) shall be applied by using the market value of
the residence at the time of refinancing in lieu of the
acquisition cost.
``(C) Qualified subprime loan.--The term `qualified
subprime loan' means an adjustable rate single-family
residential mortgage loan originated after December 31, 2001,
and before January 1, 2008, that the bond issuer determines
would be reasonably likely to cause financial hardship to the
borrower if not refinanced.
``(D) Termination.--This paragraph shall not apply to any
bonds issued after December 31, 2010.''.
(b) Increased Volume Cap for Certain Bonds.--
(1) In general.--Subsection (d) of section 146 of the
Internal Revenue Code of 1986 (relating to State ceiling) is
amended by adding at the end the following new paragraph:
``(5) Increase and set aside for housing bonds for 2008.--
``(A) Increase for 2008.--In the case of calendar year
2008, the State ceiling for each State shall be increased by
an amount equal to $10,000,000,000 multiplied by a fraction--
``(i) the numerator of which is the population of such
State, and
``(ii) the denominator of which is the total population of
all States.
``(B) Set aside.--
``(i) In general.--Any amount of the State ceiling for any
State which is attributable to an increase under this
paragraph shall be allocated solely for one or more qualified
purposes.
``(ii) Qualified purpose.--For purposes of this paragraph,
the term `qualified purpose' means--

``(I) the issuance of exempt facility bonds used solely to
provide qualified residential rental projects, or
``(II) a qualified mortgage issue (determined by
substituting `12-month period' for `42-month period' each
place it appears in section 143(a)(2)(D)(i)).''.

(2) Carryforward of unused limitations.--Subsection (f) of
section 146 of such Code (relating to elective carryforward
of unused limitation for specified purpose) is amended by
adding at the end the following new paragraph:
``(6) Special rules for increased volume cap under
subsection (d)(5).--
``(A) In general.--No amount which is attributable to the
increase under subsection (d)(5) may be used--
``(i) for a carryforward purpose other than a qualified
purpose (as defined in subsection (d)(5)), and
``(ii) to issue any bond after calendar year 2010.
``(B) Ordering rules.--For purposes of subparagraph (A),
any carryforward of an issuing authority's volume cap for
calendar year 2008 shall be treated as attributable to such
increase to the extent of such increase.''.
(c) Alternative Minimum Tax Exemption for Qualified
Mortgage Bonds, Qualified Veterans' Mortgage Bonds, and Bonds
for Qualified Residential Rental Projects.--
(1) In general.--Clause (ii) of section 57(a)(5)(C) of the
Internal Revenue Code of 1986 (relating to specified private
activity bonds) is amended by striking ``shall not include''
and all that follows and inserting ``shall not include--

``(I) any qualified 501(c)(3) bond (as defined in section
145), or
``(II) any qualified mortgage bond (as defined in section
143(a)), any qualified veterans' mortgage bond (as defined in
section 143(b)), or any exempt facility bond (as defined in
section 142(a)) issued as part of an issue 95 percent or more
of the net proceeds of which are to be used to provide
qualified residential rental projects (as defined in section
142(d)), but only if such bond is issued after the date of
the enactment of this subclause and before January 1, 2011.

Subclause (II) shall not apply to a refunding bond unless
such subclause applied to the refunded bond (or in the case
of a series of refundings, the original bond).''.
(2) Conforming amendment.--The heading for section
57(a)(5)(C)(ii) of such Code is amended by striking
``qualified 501(c)(3) bonds'' and inserting ``certain
bonds''.
(d) Effective Date.--The amendments made by this section
shall apply to bonds issued after the date of the enactment
of this Act.

SEC. 603. CREDIT FOR CERTAIN HOME PURCHASES.

(a) Allowance of Credit.--Subpart A of part IV of
subchapter A of chapter 1 of the Internal Revenue Code of
1986 (relating to nonrefundable personal credits) is amended
by inserting after section 25D the following new section:

``SEC. 25E. CREDIT FOR CERTAIN HOME PURCHASES.

``(a) Allowance of Credit.--
``(1) In general.--In the case of an individual who is a
purchaser of a qualified principal residence during the
taxable year, there shall be allowed as a credit against the
tax imposed by this chapter an amount equal to so much of the
purchase price of the residence as does not exceed $7,000.
``(2) Allocation of credit amount.--The amount of the
credit allowed under paragraph (1) shall be equally divided
among the 2 taxable years beginning with the taxable year in
which the purchase of the qualified principal residence is
made.
``(b) Limitations.--
``(1) Date of purchase.--The credit allowed under
subsection (a) shall be allowed only with respect to
purchases made--
``(A) after the date of the enactment of this section, and
``(B) before the date that is 12 months after such date.
``(2) Limitation based on amount of tax.--In the case of a
taxable year to which section 26(a)(2) does not apply, the
credit allowed under subsection (a) for any taxable year
shall not exceed the excess of--

[[Page S2495]]

``(A) the sum of the regular tax liability (as defined in
section 26(b)) plus the tax imposed by section 55, over
``(B) the sum of the credits allowable under this subpart
(other than this section and section 23) for the taxable
year.
``(3) One-time only.--
``(A) In general.--If a credit is allowed under this
section in the case of any individual (and such individual's
spouse, if married) with respect to the purchase of any
qualified principal residence, no credit shall be allowed
under this section in any taxable year with respect to the
purchase of any other qualified principal residence by such
individual or a spouse of such individual.
``(B) Joint purchase.--In the case of a purchase of a
qualified principal residence by 2 or more unmarried
individuals or by 2 married individuals filing separately, no
credit shall be allowed under this section if a credit under
this section has been allowed to any of such individuals in
any taxable year with respect to the purchase of any other
qualified principal residence.
``(c) Qualified Principal Residence.--For purposes of this
section--
``(1) In general.--The term `qualified principal residence'
means an eligible single-family residence that is purchased
to be the principal residence of the purchaser.
``(2) Eligible single-family residence.--
``(A) In general.--The term `eligible single-family
residence' means a single-family structure that is a
residence--
``(i) upon which foreclosure has been filed pursuant to the
laws of the State in which the residence is located, and
``(ii) which--

``(I) is a new previously unoccupied residence for which a
building permit was issued and construction began on or
before September 1, 2007, or
``(II) was occupied as a principal residence by the
mortgagor for at least 1 year prior to the foreclosure
filing.

``(B) Certification.--In the case of an eligible single-
family residence described in subparagraph (A)(ii)(I), no
credit shall be allowed under this section unless the
purchaser submits a certification by the seller of such
residence that such residence meets the requirements of such
subparagraph.
``(3) Principal residence.--The term `principal residence'
has the same meaning as when used in section 121.
``(d) Denial of Double Benefit.--No credit shall be allowed
under this section for any purchase for which a credit is
allowed under section 1400C.
``(e) Recapture in the Case of Certain Dispositions.--In
the event that a taxpayer--
``(1) disposes of the qualified principal residence with
respect to which a credit is allowed under subsection (a), or
``(2) fails to occupy such residence as the taxpayer's
principal residence,

at any time within 24 months after the date on which the
taxpayer purchased such residence, then the remaining portion
of the credit allowed under subsection (a) shall be
disallowed in the taxable year during which such disposition
occurred or in which the taxpayer failed to occupy the
residence as a principal residence, and in any subsequent
taxable year in which the remaining portion of the credit
would, but for this subsection, have been allowed.
``(f) Special Rules.--
``(1) Joint purchase.--
``(A) Married individuals filing separately.--In the case
of 2 married individuals filing separately, subsection (a)
shall be applied to each such individual by substituting
`$3,500' for `$7,000' in paragraph (1) thereof.
``(B) Unmarried individuals.--If 2 or more individuals who
are not married purchase a qualified principal residence, the
amount of the credit allowed under subsection (a) shall be
allocated among such individuals in such manner as the
Secretary may prescribe, except that the total amount of the
credits allowed to all such individuals shall not exceed
$7,000.
``(2) Purchase; purchase price.--Rules similar to the rules
of paragraphs (2) and (3) of section 1400C(e) (as in effect
on the date of the enactment of this section) shall apply for
purposes of this section.
``(3) Reporting requirement.--Rules similar to the rules of
section 1400C(f) (as so in effect) shall apply for purposes
of this section.
``(g) Basis Adjustment.--For purposes of this subtitle, if
a credit is allowed under this section with respect to the
purchase of any residence, the basis of such residence shall
be reduced by the amount of the credit so allowed.''.
(b) Conforming Amendments.--
(1) Section 24(b)(3)(B) of the Internal Revenue Code of
1986 is amended by striking ``and 25B'' and inserting ``,
25B, and 25E''.
(2) Section 25(e)(1)(C)(ii) of such Code is amended by
inserting ``25E,'' after ``25D,''.
(3) Section 25B(g)(2) of such Code is amended by striking
``section 23'' and inserting ``sections 23 and 25E''.
(4) Section 25D(c)(2) of such Code is amended by striking
``and 25B'' and inserting ``25B, and 25E''.
(5) Section 26(a)(1) of such Code is amended by striking
``and 25B'' and inserting ``25B, and 25E''.
(6) Section 904(i) of such Code is amended by striking
``and 25B'' and inserting ``25B, and 25E''.
(7) Subsection (a) of section 1016 of such Code is amended
by striking ``and'' at the end of paragraph (36), by striking
the period at the end of paragraph (37) and inserting ``,
and'', and by adding at the end the following new paragraph:
``(38) to the extent provided in section 25E(g).''.
(8) Section 1400C(d)(2) of such Code is amended by striking
``and 25D'' and inserting ``25D, and 25E''.
(c) Clerical Amendment.--The table of sections for subpart
A of part IV of subchapter A of chapter 1 of the Internal
Revenue Code of 1986 is amended by inserting after the item
relating to section 25D the following new item:

``Sec. 25E. Credit for certain home purchases.''.

(d) Effective Date.--The amendments made by this section
shall apply to purchases in taxable years ending after the
date of the enactment of this Act.
(e) Application of EGTRRA Sunset.--The amendment made by
subsection (b)(1) shall be subject to title IX of the
Economic Growth and Tax Relief Reconciliation Act of 2001 in
the same manner as the provisions of such Act to which such
amendment relates.

SEC. 604. ADDITIONAL STANDARD DEDUCTION FOR REAL PROPERTY
TAXES FOR NONITEMIZERS.

(a) In General.--Section 63(c)(1) of the Internal Revenue
Code of 1986 (defining standard deduction) is amended by
striking ``and'' at the end of subparagraph (A), by striking
the period at the end of subparagraph (B) and inserting ``,
and'', and by adding at the end the following new
subparagraph:
``(C) in the case of any taxable year beginning in 2008,
the real property tax deduction.''.
(b) Definition.--Section 63(c) of the Internal Revenue Code
of 1986 is amended by adding at the end the following new
paragraph:
``(8) Real property tax deduction.--
``(A) In general.--For purposes of paragraph (1), the real
property tax deduction is so much of the amount of the
eligible State and local real property taxes paid or accrued
by the taxpayer during the taxable year which do not exceed
$500 ($1,000 in the case of a joint return).
``(B) Eligible state and local real property taxes.--For
purposes of subparagraph (A), the term `eligible State and
local real property taxes' means State and local real
property taxes (within the meaning of section 164), but only
if the rate of tax for all residential real property taxes in
the jurisdiction has not been increased at any time after
April 2, 2008, and before January 1, 2009.''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2007.

TITLE VII--EMERGENCY DESIGNATION

SEC. 701. EMERGENCY DESIGNATION.

For purposes of Senate enforcement, all provisions of this
Act are designated as emergency requirements and necessary to
meet emergency needs pursuant to section 204 of S. Con. Res.
21 (110th Congress), the concurrent resolution on the budget
for fiscal year 2008.
______