119-hr4479

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4479 Introduced in House

    (IH) ]

<DOC>

119th CONGRESS
 1st Session
 H. R. 4479

 To amend the National Housing Act to direct the Secretary of Housing 
 and Urban Development to establish a program to insure certain second 
 liens secured against property for the purpose of financing the 
 construction of an accessory dwelling unit, and for other purposes.

_______________________________________________________________________

 IN THE HOUSE OF REPRESENTATIVES

 July 17, 2025

 Mr. Liccardo (for himself, Mr. Cleaver, Mr. Sherman, Mr. Thompson of 
 California, Mr. Ruiz, Mr. Soto, Mr. Peters, Mr. Garamendi, Mr. 
 Swalwell, Ms. McBride, Ms. Goodlander, Mr. Fields, Ms. Elfreth, Mr. 
 Gray, Mr. Cisneros, Mr. Stanton, and Mr. Harder of California) 
 introduced the following bill; which was referred to the Committee on 
 Financial Services

_______________________________________________________________________

 A BILL

 To amend the National Housing Act to direct the Secretary of Housing 
 and Urban Development to establish a program to insure certain second 
 liens secured against property for the purpose of financing the 
 construction of an accessory dwelling unit, and for other purposes.

 Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. INSURANCE WITH RESPECT TO THE FINANCING OF THE CONSTRUCTION 
 OF ACCESSORY DWELLING UNITS.

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

``

SEC. 259. ACCESSORY DWELLING UNIT CONSTRUCTION INSURANCE.

 ``

    (a) In General.--Not later than 2 years after the date of the 
enactment of this section, the Secretary shall establish a program to 
insure, in the discretion of the Secretary and under such terms and 
conditions as the Secretary may prescribe, certain second liens that 
are secured against properties for the purpose of financing the 
construction of accessory dwelling units.
 ``

    (b) Maximum Loan Amount.--
 ``

    (1) In general.--Except as described in paragraph

    (2) , 
 the Secretary may only insure a second lien under this section 
 that has a principal obligation in an amount that is the lesser 
 of--
 ``
        (A) 30 percent of the dollar amount determined 
 under 

section 203

    (b)

    (2)
        (A) with respect to a one-unit 
 residence; or
 ``
        (B) when combined with any outstanding amounts 
 owed on any other loans secured by a lien against the 
 same property as the second lien, 100 percent of the 
 projected value of the property after the construction 
 of the accessory dwelling unit, as determined by the 
 Secretary.
 ``

    (2) Rental income.--The Secretary may increase the amount 
 described in paragraph

    (1) based on 50 percent of any projected 
 rental income expected annually from an accessory dwelling unit 
 to be financed using the second lien to be insured under this 
 section.
 ``
            (c) Application.--The borrower seeking insurance for a second 
lien under this section shall submit an application for insurance at 
such time, in such manner, and containing such information as the 
Secretary may require, including a certification that the borrower is 
the owner of the property on which an accessory dwelling unit is to be 
constructed.
 ``
            (d) Premium.--The Secretary shall fix a premium charge for 
insurance provided under this section in an amount that may not exceed, 
for each year, 1 percent of the principal amount insured under this 
section.
 ``

    (e) Report.--Beginning on the date that is 1 year after the date 
of the enactment of this section, and annually thereafter, the 
Secretary shall submit to the Congress a report that describes the 
activities carried out under this section.
 ``

    (f) Rulemaking.--The Secretary may issue such rules as the 
Secretary determines appropriate to carry out this section.
 ``

    (g) Accessory Dwelling Unit Defined.--In this section, the term 
`accessory dwelling unit' means a dwelling unit which--
 ``

    (1) is a--
 ``
        (A) modular or prefabricated unit constructed to 
 at least 1 of the 3 most recent editions of a 
 consensus-based building code adopted by the State, 
 local jurisdiction, territory, or tribal entity;
 ``
        (B) manufactured unit (as such term is defined in 
 

section 102 of the Housing and Community Development 
 Act of 1974 (42 U.S.C. 5402)); or
 ``
            (C) conversion of an existing structure on a 
 property;
 ``

    (2) includes kitchen, sleeping, and bathroom facilities; 
 and
 ``

    (3) is added to, created within, or detached from a 
 single-family dwelling on a single property.''.

SEC. 2. PURCHASE AND SECURITIZATION OF INSURED LOANS FOR THE 
 CONSTRUCTION OF ACCESSORY DWELLING UNITS.

    (a) In General.--Except as provided in subsection

    (b) , the Director 
of the Federal Housing Finance Agency (hereafter referred to as the 
``Director'') shall permit the Federal National Mortgage Association 
and the Federal Home Loan Mortgage Corporation to purchase and 
securitize loans that are insured under 

section 259 of the National 
Housing Act.

    (b) Exception.--The Director may prohibit the purchase and 
securitization of loans that are insured under 

section 259 of the 
National Housing Act--

    (1) if there are market pressures which would pose an 
 excessive and unmitigable risk to the lending market for such 
 loans, as determined by the Director; and

    (2) beginning on the date that the Director submits to the 
 Congress a written notice with respect to such prohibition.
            (c) Report.--The Director shall include in the annual report 
required under 

section 1319B

    (a) of the Federal Housing Enterprises 
Financial Safety and Soundness Act of 1992 (12 U.S.C. 4521

    (a) ) 
information with respect to the purchase and securitization of loans 
that are insured under 

section 259 of the National Housing Act.
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