A bill to establish a Homeowner Assistance Fund at the Department of the Treasury.

II 117TH CONGRESS 1ST SESSION S. 254 To establish a Homeowner Assistance Fund at the Department of the Treasury. IN THE SENATE OF THE UNITED STATES FEBRUARY 4, 2021 Mr. REED (for himself, Mr. BROWN, Mr. LEAHY, Mr. MENENDEZ, Ms. WAR- REN, Mr. VAN HOLLEN, Ms. CORTEZ MASTO, Ms. SINEMA, Mrs. MUR- RAY, Mr. WYDEN, Mr. DURBIN, Mr. CARPER, Mr. SANDERS, Mr. CASEY, Ms. KLOBUCHAR, Mr. WHITEHOUSE, Mr. MERKLEY, Mrs. GILLIBRAND, Mr. BLUMENTHAL, Ms. BALDWIN, Mr. KAINE, Ms. DUCKWORTH, Mr. CARDIN, Mr. BOOKER, Mr. TESTER, Mr. OSSOFF, Ms. SMITH, Mrs. SHA- HEEN, Ms. HIRONO, Mr. SCHATZ, and Mr. WARNER) introduced the fol- lowing bill; which was read twice and referred to the Committee on Bank- ing, Housing, and Urban Affairs A BILL To establish a Homeowner Assistance Fund at the Department of the Treasury. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. HOMEOWNER ASSISTANCE FUND. 3 (a) DEFINITIONS.—In this section: 4 (1) CONFORMING LOAN LIMIT.—The term ‘‘con- 5 forming loan limit’’ means the applicable limitation 6 governing the maximum original principal obligation 7 VerDate Sep 11 2014 00:54 Feb 22, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S254.IS S254 pbinns on DSKJLVW7X2PROD with BILLS 2 •S 254 IS for a mortgage secured by a single-family residence, 1 a mortgage secured by a 2-family residence, a mort- 2 gage secured by a 3-family residence, or a mortgage 3 secured by a 4-family residence, as determined and 4 adjusted annually under section 302(b)(2) of the 5 Federal National Mortgage Association Charter Act 6 (12 U.S.C. 1717(b)(2)) and section 305(a)(2) of the 7 Federal Home Loan Mortgage Corporation Act (12 8 U.S.C. 1454(a)(2)). 9 (2) ELIGIBLE HOUSEHOLD.—The term ‘‘eligible 10 household’’ means a household whose income does 11 not exceed 150 percent of the area median income 12 for their household size, as determined by the Sec- 13 retary of Housing and Urban Development. 14 (3) MORTGAGE.—The term ‘‘mortgage’’ means 15 a mortgage— 16 (A) that is secured by the principal resi- 17 dence of a borrower; and 18 (B) the unpaid principal balance of which 19 was, at the time of origination, not more than 20 the conforming loan limit. 21 (4) SECRETARY.—The term ‘‘Secretary’’ means 22 the Secretary of the Treasury. 23 (5) STATE.—The term ‘‘State’’ means any 24 State of the United States, the District of Columbia, 25 VerDate Sep 11 2014 00:54 Feb 22, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S254.IS S254 pbinns on DSKJLVW7X2PROD with BILLS 3 •S 254 IS any territory of the United States, the Common- 1 wealth of Puerto Rico, Guam, American Samoa, the 2 Virgin Islands, and the Northern Mariana Islands. 3 (b) ESTABLISHMENT OF FUND.—There is estab- 4 lished at the Department of the Treasury a Homeowner 5 Assistance Fund to provide such funds as are appro- 6 priated in subsection (f) to State housing finance agencies 7 and any entity named under subsection (j) for the purpose 8 of preventing homeowner mortgage defaults, foreclosures, 9 and displacements of individuals and families experiencing 10 financial hardship after January 21, 2020. 11 (c) ALLOCATION OF FUNDS.— 12 (1) IN GENERAL.—The Secretary shall establish 13 such criteria as are necessary to allocate the funds 14 available within the Homeowner Assistance Fund to 15 each State. The Secretary shall allocate such funds 16 among all States taking into consideration the num- 17 ber of unemployment claims within a State relative 18 to the nation-wide number of unemployment claims. 19 (2) SMALL STATE MINIMUM.— 20 (A) IN GENERAL.—Each State of the 21 United States, the District of Columbia, and 22 the Commonwealth of Puerto Rico shall receive 23 no less than $250,000,000 for the purposes es- 24 tablished in subsection (b). 25 VerDate Sep 11 2014 00:54 Feb 22, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S254.IS S254 pbinns on DSKJLVW7X2PROD with BILLS 4 •S 254 IS (B) PRO RATA ADJUSTMENTS.—The Sec- 1 retary shall adjust on a pro rata basis the 2 amount of the payments for each State of the 3 United States, the District of Columbia, and 4 the Commonwealth of Puerto Rico under this 5 subsection without regard to this subparagraph 6 to the extent necessary to comply with the re- 7 quirements of subparagraph (A). 8 (3) TERRITORY SET-ASIDE.—Notwithstanding 9 any other provision of this section, of the amounts 10 appropriated under subsection (f), the Secretary 11 shall reserve $200,000,000 to be disbursed to Guam, 12 American Samoa, the Virgin Islands, and the North- 13 ern Mariana Islands based on each such territory’s 14 share of the combined total population of all such 15 territories, as determined by the Secretary. For the 16 purposes of this paragraph, population shall be de- 17 termined based on the most recent year for which 18 data are available from the United States Census 19 Bureau. 20 (4) TRIBAL SET-ASIDE.—The Secretary shall 21 allocate funds to an entity designated under sub- 22 section (j) pursuant to the requirements of that sub- 23 section. 24 (d) DISBURSEMENT OF FUNDS.— 25 VerDate Sep 11 2014 00:54 Feb 22, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S254.IS S254 pbinns on DSKJLVW7X2PROD with BILLS 5 •S 254 IS (1) INITIAL DISBURSEMENT.—The Secretary 1 shall disburse to the State housing finance agencies 2 and entities designated under subsection (j) not less 3 than 1⁄2 of the amount made available pursuant to 4 this section, and in accordance with the allocations 5 established under subsections (c) and (j), not later 6 than 120 days after the date of enactment of this 7 Act. The Secretary or designee shall enter into a 8 contract with each State housing finance agency and 9 each entity designated under subsection (j), which 10 may be amended from time to time, establishing the 11 terms of the use of such funds, in accordance with 12 subsection (e), prior to the disbursement of such 13 funds. 14 (2) SECOND DISBURSEMENT.—The Secretary 15 shall disburse all funds made available pursuant to 16 this section, and in accordance with the allocations 17 established under subsections (c) and (j), not later 18 than 180 days after the date of enactment of this 19 Act. 20 (e) PERMISSIBLE USES OF FUND.— 21 (1) IN GENERAL.—Funds made available to 22 State housing finance agencies and designated enti- 23 ties under subsection (j) pursuant to this section 24 may be used to assist eligible households for the pur- 25 VerDate Sep 11 2014 00:54 Feb 22, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S254.IS S254 pbinns on DSKJLVW7X2PROD with BILLS 6 •S 254 IS poses established under subsection (b), which may 1 include— 2 (A) mortgage payment assistance; 3 (B) financial assistance to allow a bor- 4 rower to reinstate their mortgage following a 5 period of forbearance; 6 (C) principal reduction; 7 (D) payment assistance for— 8 (i) utilities, including electric, gas, 9 and water; 10 (ii) internet service, including 11 broadband internet access service, as de- 12 fined in section 8.1(b) of title 47, Code of 13 Federal Regulations (or any successor reg- 14 ulation); and 15 (iii) property taxes; 16 (E) any program established under the 17 Housing Finance Agency Innovation Fund for 18 the Hardest Hit Housing Markets; 19 (F) reimbursement of funds expended by a 20 State or local government during the period be- 21 ginning on January 21, 2020, and ending on 22 the date that the first funds are disbursed by 23 the State under the Homeowner Assistance 24 Fund, for the purpose of providing housing or 25 VerDate Sep 11 2014 00:54 Feb 22, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S254.IS S254 pbinns on DSKJLVW7X2PROD with BILLS 7 •S 254 IS utility payment assistance to individuals or oth- 1 erwise providing funds to prevent foreclosure or 2 eviction of a homeowner or tenant or prevent 3 mortgage delinquency or loss of housing or util- 4 ities as a response to the coronavirus disease 5 2019 (COVID–19) pandemic; and 6 (G) any other assistance to prevent evic- 7 tion, mortgage delinquency or default, fore- 8 closure, or the loss of utility services for an eli- 9 gible household. 10 (2) ADMINISTRATIVE EXPENSES.—Not greater 11 than 10 percent of the amount allocated to a State 12 or an entity pursuant to subsections (c) or (j) may 13 be used by a State housing financing agency or an 14 entity for administrative expenses. Any amounts al- 15 located to administrative expenses that are no longer 16 necessary for administrative expenses may be used 17 in accordance with paragraph (1). 18 (f) APPROPRIATION.—There is appropriated, out of 19 amounts in the Treasury not otherwise appropriated, for 20 the fiscal year ending September 30, 2021, to remain 21 available until expended or transferred or credited under 22 subsection (h) or subsection (j), $75,000,000,000 to the 23 Homeowner Assistance Fund established under subsection 24 (b). 25 VerDate Sep 11 2014 00:54 Feb 22, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S254.IS S254 pbinns on DSKJLVW7X2PROD with BILLS 8 •S 254 IS (g) USE OF HOUSING FINANCE AGENCY INNOVATION 1 FUND FOR THE HARDEST HIT HOUSING MARKETS 2 FUNDS.—A State housing finance agency may reallocate 3 any administrative or programmatic funds it has received 4 as an allocation from the Housing Finance Agency Inno- 5 vation Fund for the Hardest Hit Housing Markets created 6 pursuant to section 101(a) of the Emergency Economic 7 Stabilization Act of 2008 (12 U.S.C. 5211(a)) that have 8 not been otherwise allocated or disbursed as of the date 9 of enactment of this Act to supplement any administrative 10 or programmatic funds received from the Homeowner As- 11 sistance Fund. Such reallocated funds shall not be consid- 12 ered when allocating resources from the Homeowner As- 13 sistance Fund using the process established under sub- 14 section (c) and shall remain available for the uses per- 15 mitted in subsection (e) and under the terms and condi- 16 tions established by the contract with the Secretary cre- 17 ated pursuant to subsection (d)(1) and the terms of sub- 18 section (h). 19 (h) RESCISSION OF FUNDS.—Any funds that have 20 not been allocated by a State housing finance agency to 21 provide assistance as described under subsection (e) by 22 December 31, 2030, shall be reallocated by the Secretary 23 in the following manner: 24 VerDate Sep 11 2014 00:54 Feb 22, 2021 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S254.IS S254 pbinns on DSKJLVW7X2PROD with BILLS 9 •S 254 IS (1) 65 percent shall be transferred or credited 1 to the Housing Trust Fund established under sec- 2 tion 1338 of the Federal Housing Enterprises Fi- 3 nancial Safety and Soundness Act of 1992 (12 4 U.S.C. 4568). 5 (2) 35 percent shall be transferred or credited 6 to the Capital Magnet Fund under section 1339 of 7 the Federal Housing Enterprises Financial Safety 8 and Soundness Act of 1992 (12 U.S.C. 4569). 9 (i) REPORTING REQUIREMENTS.—The Secretary 10 shall provide public reports not less frequently than quar- 11 terly regarding the use of funds provided by the Home- 12 owner Assistance Fund. Such reports shall include the fol- 13 lowing data by State or entity receiving funds pursuant 14 to subsection (j) and by program within each State or enti- 15 ty receiving funds pursuant to subsection (j), both for the 16 past quarter and for the life of the program— 17 (1) the amount of funds allocated; 18 (2) the amount of funds disbursed; 19 (3) the number of households and individuals 20 assisted; 21 (4) the acceptance rate of applicants; 22 (5) the average amount of assistance provided 23 per household receiving assistance; 24 VerDate Sep 11 2014 00:54 Feb 22, 2021 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S254.IS S254 pbinns on DSKJLVW7X2PROD with BILLS 10 •S 254 IS (6) the average length of assistance provided 1 per household receiving assistance; 2 (7) the income ranges of households for each 3 household receiving assistance; 4 (8) demographic information about each house- 5 hold receiving assistance, including race, ethnicity, 6 and service member status; and 7 (9) the outcome 12 months after the household 8 has received assistance. 9 (j) TRIBAL SET-ASIDE.— 10 (1) DEFINITIONS.—In this subsection: 11 (A) DEPARTMENT OF HAWAIIAN HOME 12 LANDS.—The term ‘‘Department of Hawaiian 13 Home Lands’’ has the meaning given the term 14 in section 801 of the Native American Housing 15 Assistance and Self-Determination Act of 1996 16 (42 U.S.C. 4221). 17 (B) ELIGIBLE RECIPIENT.—The term ‘‘eli- 18 gible recipient’’ means any entity eligible to re- 19 ceive a grant under section 101 of the Native 20 American Housing Assistance and Self-Deter- 21 mination Act of 1996 (25 U.S.C. 4111). 22 (2) SET-ASIDE.— 23 (A) IN GENERAL.—Notwithstanding any 24 other provision of this section, of the amounts 25 VerDate Sep 11 2014 00:54 Feb 22, 2021 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S254.IS S254 pbinns on DSKJLVW7X2PROD with BILLS 11 •S 254 IS appropriated under subsection (f), the Secretary 1 shall use 5 percent to make grants to eligible 2 recipients for the purposes described in sub- 3 section (e)(1). 4 (B) NATIVE HAWAIIAN SET-ASIDE.—Of the 5 funds set aside under subparagraph (A), the 6 Secretary shall use 0.3 percent to make grants 7 to the Department of Hawaiian Home Lands 8 for the purposes described in subsection (e)(1). 9 (3) REQUIREMENTS.— 10 (A) ALLOCATION.—Except for the funds 11 set aside under paragraph (2)(B), the Secretary 12 shall allocate the funds set aside under para- 13 graph (2)(A) using the allocation formula de- 14 scribed in subpart D of part 1000 of title 24, 15 Code of Federal Regulations (or successor regu- 16 lations). 17 (B) NATIVE HAWAIIANS.—The Secretary 18 shall use the funds made available under para- 19 graph (2)(B) in accordance with part 1006 of 20 title 24, Code of Federal Regulations (or suc- 21 cessor regulations). 22 (4) RESCISSION.—The Secretary shall transfer 23 any funds made available under paragraph (2) that 24 have not been allocated by an eligible recipient or 25 VerDate Sep 11 2014 00:54 Feb 22, 2021 Jkt 019200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S254.IS S254 pbinns on DSKJLVW7X2PROD with BILLS 12 •S 254 IS the Department of Hawaiian Home Lands, as appli- 1 cable, to provide the assistance described in sub- 2 section (e)(1) by December 31, 2030, to the Sec- 3 retary of Housing and Urban Development to carry 4 out the Native American Housing Assistance and 5 Self-Determination Act of 1996 (25 U.S.C. 4101 et 6 seq.). 7 Æ VerDate Sep 11 2014 00:54 Feb 22, 2021 Jkt 019200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6301 E:\B [Text truncated for display. 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