Page:United States Statutes at Large Volume 106 Part 5.djvu/156

 106 STAT. 3794 PUBLIC LAW 102-550—OCT. 28, 1992 Multifamily Housing Finance Improvement Act 12 USC 1707. Subtitle C—Improvement of Financing for Multifamily Housing SEC. 541. SHORT TITLE. This subtitle may be cited as the 'Multifamily Housing Finance Improvement Act". SEC. 542. MULTIFAMILY MORTGAGE CREDIT DEMONSTRATIONS. (a) IN GENERAL.— The Secretary of Housing and Urban Development (hereinafter referred to as the "Secretary) shall carry out programs through the Federal Housing Administration to demonstrate the effectiveness of providing new forms of Federal credit enhctncement for multifamilv loans, m carrying out demonstration programs, the Secretary shall include an evaluation of the effectiveness of entering into partnerships or other contractual arrangements including reinsurance and risk-sharing agreements with State or local housing finance agencies, the Federal Housing Finance Board, the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, qualified financial institutions, and other State or local mortgage insurance companies or bank lending consortia. (b) RISK-SHARING PILOT PROGRAM. — (1) IN GENERAL. — The Secretary shall carry out a pilot program through the Federal Housing Administration to provide for risk sharing related to mortgages on multifamily housing. (2) AUTHORITY FOR REINSURANCE AGREEMENTS. — The Secretary may enter into reinsurance agreements (as such term is defined in section 544) with the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, qualified financial institutions, qualified housing finance agencies, and the Federal Housing Finance Board. The agreements may provide for risk-sharing and other forms of credit enhancement with respect to mortgage lending on multifamily housing, i including reinsurance with respect to pools of loans on multifamily housing properties, that the Secretary determines to be appropriate to carry out the purposes of this subsection. The agreements shall be in a form and have such terms and conditions as the Secretary determines to be appropriate to carry out the piuposes of this subsection. (3) DEVELOPMENT OF ALTERNATIVES. — The Secretary shall develop and assess a variety of risk-sharing alternatives, including arrangements under which the Secretary assumes an appropriate share of the risk related to long-term mortgage loans on newly constructed or acquired multifamily rent^ housing, mortgage refinancings, bridge financing for construction, and other forms of multifamily housing mortgage lending that the Secretary deems appropriate to carry out the purposes of this subsection. Such alternatives shall be designed— (A) to ensure that other parties bear a share of the risk, in percentage amount and in position of exposure, that is sufficient to create strong, market-oriented incentives for other participating parties to maintain sound underwriting and loan management practices; (B) to develop credit mechanisms, including sound underwriting criteria, processing methods, and credit

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