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Code · BILL · 114th Congress · H.R. 1491 (Introduced in House) — To reform the housing finance system of the United States, and for other purposes. · Sec. 401

Sec. 401. Establishment of multifamily subsidiaries

857 words·~4 min read·/bill/114/hr/1491/ih/section-401·

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The Director of Ginnie Mae, in consultation with the Secretary of the Treasury, shall direct the Federal National Mortgage Association to develop a plan, not later than 180 days after the date of enactment of this Act, to establish a multifamily subsidiary for purposes of expeditiously— providing sufficient multifamily financing in the primary, secondary, and tertiary geographical markets, including in rural markets and through a diversity of experienced multifamily lenders; and establishing a competitive multifamily market for multifamily housing guarantors engaging in multifamily covered securities.
The Director shall direct the Federal National Mortgage Association to establish a multifamily subsidiary not later than 1 year after the date of enactment of this Act. The Director, in consultation with the Secretary of the Treasury, shall direct the Federal Home Loan Mortgage Corporation to develop a plan, not later than 180 days after the date of enactment of this Act, to establish a multifamily subsidiary for purposes of expeditiously— providing sufficient multifamily financing in the primary, secondary, and tertiary geographical markets, including in rural markets and through a diversity of experienced multifamily lenders; and establishing a competitive multifamily market for multifamily housing guarantors engaging in multifamily covered securities.
The Director shall direct the Federal Home Loan Mortgage Corporation to establish a multifamily subsidiary not later than 1 year after the date of enactment of this Act. Notwithstanding the provisions under title III or any other provision of law, effective on the date on which the multifamily subsidiary is established under subsection (a)(1)(B), all employees, functions, activities, infrastructure, property, including the Delegated Underwriting and Servicing Lender Program and other intellectual property, platforms, technology, or any other object or service of the Federal National Mortgage Association necessary to the support, maintenance, and operation of the multifamily business of the Federal National Mortgage Association shall be transferred and contributed, without cost, to the multifamily subsidiary.
In connection with the transfer required under subparagraph (A), the Federal National Mortgage Association shall contribute, in any form or manner the Director may determine, subject to the approval right of the Secretary of the Treasury in the Senior Preferred Stock Purchase Agreement, any capital necessary to ensure that the multifamily subsidiary established under subsection (a)(1)(B) has, in the determination of the Director, sufficient capital to carry out its multifamily business, including the ability to obtain warehouse lines of credit.
In carrying out the multifamily business transferred pursuant to subparagraph (A), the multifamily subsidiary established under subsection (a)(1)(B) shall ensure that any such business continues to operate, as applicable, consistent with— the Delegated Underwriting and Servicing Lender Program established by the Federal National Mortgage Association; any other programs, activities, and contractual agreements of the enterprises that support the enterprises' provision of liquidity to the multifamily housing market; and the provisions of this title.
Notwithstanding the provisions under title VI or any other provision of law, effective on the date on which the multifamily subsidiary is established under subsection (a)(2)(B), all employees, functions, activities, infrastructure, property, including the Capital Market Execution Program Series K Structured 2Pass-Through Certificates originated and offered under the Program Plus Lender Program and other intellectual property, platforms, technology, or any other object or service of the Federal Home Loan Mortgage Corporation necessary to the support, maintenance, and operation of the multifamily business of the Federal Home Loan Mortgage Corporation shall be transferred and contributed, without cost, to the multifamily subsidiary.
In connection with the transfer required under subparagraph (A), the Federal Home Loan Mortgage Corporation shall contribute, in any form or manner the Director may determine, subject to the approval right of the Secretary of the Treasury in the Senior Preferred Stock Purchase Agreement, any capital necessary to ensure that the multifamily subsidiary established under subsection (a)(2)(B) has, in the determination of the Director, sufficient capital to carry out its multifamily business, including the ability to obtain warehouse lines of credit.
In carrying out the multifamily business transferred pursuant to subparagraph (A), the multifamily subsidiary established under subsection (a)(2)(B) shall ensure that any such business continues to operate, as applicable, consistent with— the Capital Market Execution Program Series K Structured 2Pass-Through Certificates originated and offered under the Program Plus Lender Program established by the Federal Home Loan Mortgage Corporation; any other programs, activities, and contractual agreements of the enterprises that support the enterprises' provision of liquidity to the multifamily housing market; and the provisions of this title.
The multifamily subsidiaries established by the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation under subsection
(a)may retain a limited multifamily mortgage loan portfolio to— aggregate mortgage loans for pooled securities executions; implement pilot mortgage loan programs and other risk-sharing transactions and product modification testing; engage in the financing of properties with rent-regulatory restrictions, off-campus student housing, and senior and assisted living developments; and perform additional activities as may be established by the Director for the purpose of facilitating the continuation of existing multifamily activities. For purposes of expeditiously meeting the criteria under clauses
(i)and
(ii)of paragraphs (1)(A) and (2)(A) of subsection (a), the multifamily subsidiaries established under subsection
(a)shall not be subject to any portfolio reduction required under title III.
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