---
kind: "section"
citation: "12 U.S.C. § 1454"
title: "12"
title_heading: "Banks and Banking"
number: "1454"
heading: "Purchase and sale of mortgages; residential mortgages; conventional mortgages; terms and conditions of sale or other disposition; authority to enter into, perform, and carry out transactions"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/12/1454"
units:
  - "Chapter 11A — Federal Home Loan Mortgage Corporation"
---

# §1454. Purchase and sale of mortgages; residential mortgages; conventional mortgages; terms and conditions of sale or other disposition; authority to enter into, perform, and carry out transactions

- (a) **Authority for purchase and sale; residential mortgages; conventional mortgages; terms and conditions of sale or other disposition; lending activities—**
  - (1) The [Corporation](/usc/12/1451.md?p=b) is authorized to purchase, and make commitments to purchase, [residential mortgages](/usc/12/1451.md?p=h). The [Corporation](/usc/12/1451.md?p=b) may hold and deal with, and sell or otherwise dispose of, pursuant to commitments or otherwise, any such [mortgage](/usc/12/1451.md?p=d) or interest therein. The operations of the [Corporation](/usc/12/1451.md?p=b) under this section shall be confined so far as practicable to [residential mortgages](/usc/12/1451.md?p=h) which are deemed by the [Corporation](/usc/12/1451.md?p=b) to be of such quality, type, and class as to meet generally the purchase standards imposed by private institutional [mortgage](/usc/12/1451.md?p=d) investors. The [Corporation](/usc/12/1451.md?p=b) may establish requirements, and impose charges or fees, which may be regarded as elements of pricing, for different classes of sellers or servicers, and for such purposes the [Corporation](/usc/12/1451.md?p=b) is authorized to classify sellers or servicers according to type, size, location, assets, or, without limitation on the generality of the foregoing, on such other basis or bases of differentiation as the [Corporation](/usc/12/1451.md?p=b) may consider necessary or appropriate to effectuate the purposes or provisions of this chapter. The [Corporation](/usc/12/1451.md?p=b) may specify requirements concerning among other things, (A) minimum net worth; (B) supervisory mechanisms; (C) warranty compensation mechanisms; (D) prior approval of facilities; (E) prior origination and servicing experience with respect to different types of [mortgages](/usc/12/1451.md?p=d); (F) capital contributions and substitutes; (G) [mortgage](/usc/12/1451.md?p=d) purchase volume limits; and (H) reduction of [mortgage](/usc/12/1451.md?p=d) purchases during periods of borrowing. With respect to any particular type of seller, the [Corporation](/usc/12/1451.md?p=b) shall not be required to make available programs involving prior approval of [mortgages](/usc/12/1451.md?p=d), optional delivery of [mortgages](/usc/12/1451.md?p=d), and purchase of other than [conventional mortgages](/usc/12/1451.md?p=i) to an extent greater than the [Corporation](/usc/12/1451.md?p=b) elects to make such programs available to other types of eligible sellers. Any requirements specified by the [Corporation](/usc/12/1451.md?p=b) pursuant to the preceding three sentences must bear a rational relationship to the purposes or provisions of this chapter, but will not be considered discriminatory solely on the grounds of differential effects on types of eligible sellers. Insofar as is practicable, the [Corporation](/usc/12/1451.md?p=b) shall make reasonable efforts to encourage participation in its programs by each type of eligible seller. Nothing in this section authorizes the [Corporation](/usc/12/1451.md?p=b) to impose any charge or fee upon any [mortgagee](/usc/12/1707.md?p=b) approved by the [Secretary](/usc/12/1715z–22a.md?p=4) of Housing and Urban Development for participation in any [mortgage insurance program](/usc/12/1451.md?p=l) under the National Housing Act [[12 U.S.C. 1701](/usc/12/1701.md) et seq.] solely because of such status.
  - (2) No [conventional mortgage](/usc/12/1451.md?p=i) secured by a [property](/usc/12/1451.md?p=g) comprising one- to four-family dwelling units shall be purchased under this section if the outstanding principal balance of the [mortgage](/usc/12/1451.md?p=d) at the time of purchase exceeds 80 per centum of the value of the [property](/usc/12/1451.md?p=g) securing the [mortgage](/usc/12/1451.md?p=d), unless (A) the seller retains a participation of not less than 10 per centum in the [mortgage](/usc/12/1451.md?p=d); (B) for such period and under such circumstances as the [Corporation](/usc/12/1451.md?p=b) may require, the seller agrees to repurchase or replace the [mortgage](/usc/12/1451.md?p=d) upon demand of the [Corporation](/usc/12/1451.md?p=b) in the event that the [mortgage](/usc/12/1451.md?p=d) is in default; or (C) that portion of the unpaid principal balance of the [mortgage](/usc/12/1451.md?p=d) which is in excess of such 80 per centum is guaranteed or insured by a qualified insurer as determined by the [Corporation](/usc/12/1451.md?p=b). The [Corporation](/usc/12/1451.md?p=b) shall not issue a commitment to purchase a [conventional mortgage](/usc/12/1451.md?p=i) prior to the date the [mortgage](/usc/12/1451.md?p=d) is originated, if such [mortgage](/usc/12/1451.md?p=d) is eligible for purchase under the preceding sentence only by reason of compliance with the requirements of clause (A) of such sentence. The [Corporation](/usc/12/1451.md?p=b) may purchase a [conventional mortgage](/usc/12/1451.md?p=i) which was originated more than one year prior to the purchase date only if the seller is the Federal Deposit Insurance [Corporation](/usc/12/1451.md?p=b), the Resolution Trust [Corporation](/usc/12/1451.md?p=b), the National [Credit](/usc/12/5481.md?p=7) Union Administration, or any other seller currently engaged in [mortgage](/usc/12/1451.md?p=d) lending or investing activities. With respect to any transaction in which a seller contemporaneously sells [mortgages](/usc/12/1451.md?p=d) originated more than one year old prior to the date of sale to the [Corporation](/usc/12/1451.md?p=b) and receives in payment for such [mortgages](/usc/12/1451.md?p=d) [securities](/usc/12/1451.md?p=j) representing undivided interests only in those [mortgages](/usc/12/1451.md?p=d), the [Corporation](/usc/12/1451.md?p=b) shall not impose any fee or charge upon an eligible seller which is not a member of a Federal Home Loan Bank which differs from that imposed upon an eligible seller which is such a member. The [Corporation](/usc/12/1451.md?p=b) shall establish limitations governing the maximum original principal obligation of [conventional mortgages](/usc/12/1451.md?p=i) that are purchased by it; in any case in which the [Corporation](/usc/12/1451.md?p=b) purchases a participation interest in such a [mortgage](/usc/12/1451.md?p=d), the limitation shall be calculated with respect to the total original principal obligation of the [mortgage](/usc/12/1451.md?p=d) and not merely with respect to the interest purchased by the [Corporation](/usc/12/1451.md?p=b). Such limitations shall not exceed $417,000 for a [mortgage](/usc/12/1451.md?p=d) secured by a single-family residence, $533,850 for a [mortgage](/usc/12/1451.md?p=d) secured by a 2-family residence, $645,300 for a [mortgage](/usc/12/1451.md?p=d) secured by a 3-family residence, and $801,950 for a [mortgage](/usc/12/1451.md?p=d) secured by a 4-family residence, except that such maximum limitations shall be adjusted effective January 1 of each year beginning after the effective date of the Federal Housing Finance Regulatory Reform Act of 2008, subject to the limitations in this paragraph. Each adjustment shall be made by adding to each such amount (as it may have been previously adjusted) a percentage thereof equal to the percentage increase, during the most recent 12-month or 4-quarter period ending before the time of determining such annual adjustment, in the housing price index maintained by the [Director](/usc/12/5481.md?p=10) of the Federal Housing Finance Agency (pursuant to [section 4542 of this title](/usc/12/4542.md)). If the change in such house price index during the most recent 12-month or 4-quarter period ending before the time of determining such annual adjustment is a decrease, then no adjustment shall be made for the next year, and the next adjustment shall take into account prior declines in the house price index, so that any adjustment shall reflect the net change in the house price index since the last adjustment. Declines in the house price index shall be accumulated and then reduce increases until subsequent increases exceed prior declines. The foregoing limitations may be increased by not to exceed 50 per centum with respect to [properties](/usc/12/1451.md?p=g) located in Alaska, Guam, Hawaii, and the Virgin Islands. Such foregoing limitations shall also be increased, with respect to [properties](/usc/12/1451.md?p=g) of a particular size located in any area for which 115 percent of the median house price for such size residence exceeds the foregoing limitation for such size residence, to the lesser of 150 percent of such limitation for such size residence or the amount that is equal to 115 percent of the median house price in such area for such size residence.
  - (3) The sale or other disposition by the [Corporation](/usc/12/1451.md?p=b) of a [mortgage](/usc/12/1451.md?p=d) under this section may be with or without recourse, and shall be upon such terms and conditions relating to resale, repurchase, guaranty, substitution, replacement, or otherwise as the [Corporation](/usc/12/1451.md?p=b) may [prescribe](/usc/12/1451.md?p=f).
  - (4)
    - (A) The [Corporation](/usc/12/1451.md?p=b) is authorized to purchase, service, sell, lend on the [security](/usc/12/1451.md?p=j) of, and otherwise deal in (i) [residential mortgages](/usc/12/1451.md?p=h) that are secured by a subordinate lien against a one- to four-family residence that is the principal residence of the [mortgagor](/usc/12/1707.md?p=b); and (ii) [residential mortgages](/usc/12/1451.md?p=h) that are secured by a subordinate lien against a [property](/usc/12/1451.md?p=g) comprising five or more family dwelling units. If the [Corporation](/usc/12/1451.md?p=b) shall have purchased, serviced, sold, or otherwise dealt with any other outstanding [mortgage](/usc/12/1451.md?p=d) secured by the same residence, the aggregate original amount of such other [mortgage](/usc/12/1451.md?p=d) and the [mortgage](/usc/12/1451.md?p=d) authorized to be purchased, serviced, sold, or otherwise dealt with under this paragraph shall not exceed the applicable limitation determined under [paragraph (2)](#a-2).
    - (B) The [Corporation](/usc/12/1451.md?p=b) shall establish limitations governing the maximum original principal obligation of such [mortgages](/usc/12/1451.md?p=d). In any case in which the [Corporation](/usc/12/1451.md?p=b) purchases a participation interest in such a [mortgage](/usc/12/1451.md?p=d), the limitation shall be calculated with respect to the total original principal obligation of such [mortgage](/usc/12/1451.md?p=d) secured by a subordinate lien and not merely with respect to the interest purchased by the [Corporation](/usc/12/1451.md?p=b). Such limitations shall not exceed (i) with respect to [mortgages](/usc/12/1451.md?p=d) described in subparagraph (A)(i), 50 per centum of the single-family residence [mortgage](/usc/12/1451.md?p=d) limitation determined under [paragraph (2)](#a-2); and (ii) with respect to [mortgages](/usc/12/1451.md?p=d) described in subparagraph (A)(ii), the applicable limitation determined under [paragraph (2)](#a-2).
    - (C) No subordinate [mortgage](/usc/12/1451.md?p=d) against a one- to four-family residence shall be purchased by the [Corporation](/usc/12/1451.md?p=b) if the total outstanding indebtedness secured by the [property](/usc/12/1451.md?p=g) as a result of such [mortgage](/usc/12/1451.md?p=d) exceeds 80 per centum of the value of such [property](/usc/12/1451.md?p=g) unless (i) that portion of such total outstanding indebtedness that exceeds such 80 per centum is guaranteed or insured by a qualified insurer as determined by the [Corporation](/usc/12/1451.md?p=b); (ii) the seller retains a participation of not less than 10 per centum in the [mortgage](/usc/12/1451.md?p=d); or (iii) for such period and under such circumstances as the [Corporation](/usc/12/1451.md?p=b) may require, the seller agrees to repurchase or replace the [mortgage](/usc/12/1451.md?p=d) upon demand of the [Corporation](/usc/12/1451.md?p=b) in the event that the [mortgage](/usc/12/1451.md?p=d) is in default. The [Corporation](/usc/12/1451.md?p=b) shall not issue a commitment to purchase a subordinate [mortgage](/usc/12/1451.md?p=d) prior to the date the [mortgage](/usc/12/1451.md?p=d) is originated, if such [mortgage](/usc/12/1451.md?p=d) is eligible for purchase under the preceding sentence only by reason of compliance with the requirements of clause (iii) of such sentence.
  - (5) The [Corporation](/usc/12/1451.md?p=b) is authorized to lend on the [security](/usc/12/1451.md?p=j) of, and to make commitments to lend on the [security](/usc/12/1451.md?p=j) of, any [mortgage](/usc/12/1451.md?p=d) that the [Corporation](/usc/12/1451.md?p=b) is authorized to purchase under this section. The volume of the [Corporation](/usc/12/1451.md?p=b)’s lending activities and the establishment of its loan ratios, interest rates, maturities, and charges or fees in its secondary market operations under this paragraph, shall be determined by the [Corporation](/usc/12/1451.md?p=b) from time to time; and such determinations shall be consistent with the objectives that the lending activities shall be conducted on such terms as will reasonably prevent excessive use of the [Corporation](/usc/12/1451.md?p=b)’s facilities, and that the operations of the [Corporation](/usc/12/1451.md?p=b) under this paragraph shall be within its income derived from such operations and that such operations shall be fully self-supporting. The [Corporation](/usc/12/1451.md?p=b) shall not be permitted to use its lending authority under this paragraph (A) to advance funds to a [mortgage](/usc/12/1451.md?p=d) seller on an interim basis, using [mortgage](/usc/12/1451.md?p=d) loans as collateral, pending the sale of the [mortgages](/usc/12/1451.md?p=d) in the secondary market; or (B) to originate [mortgage](/usc/12/1451.md?p=d) loans. Notwithstanding any Federal, [State](/usc/12/1451.md?p=k), or other law to the contrary, the [Corporation](/usc/12/1451.md?p=b) is hereby empowered, in connection with any loan under this paragraph, whether before or after any default, to provide by contract with the borrower for the settlement or extinguishment, upon default, of any redemption, equitable, legal, or other right, title, or interest of the borrower in any [mortgage](/usc/12/1451.md?p=d) or [mortgages](/usc/12/1451.md?p=d) that constitute the [security](/usc/12/1451.md?p=j) for the loan; and with respect to any such loan, in the event of default and pursuant otherwise to the terms of the contract, the [mortgages](/usc/12/1451.md?p=d) that constitute such [security](/usc/12/1451.md?p=j) shall become the absolute [property](/usc/12/1451.md?p=g) of the [Corporation](/usc/12/1451.md?p=b).
- (b) **Authority of other institutions to enter into, perform, and carry out transactions—** Notwithstanding any other law, authority to enter into and to perform and carry out any transactions or matter referred to in this section is conferred on any Federal home loan bank, the Resolution Trust [Corporation](/usc/12/1451.md?p=b), the Federal Deposit Insurance [Corporation](/usc/12/1451.md?p=b), the National [Credit](/usc/12/5481.md?p=7) Union Administration, any Federal savings and loan association, any Federal home loan bank member, and any other financial institution the deposits or accounts of which are insured by an agency of the United States to the extent that Congress has the power to confer such authority.
- (c) **Prior approval of Secretary for new programs—** The [Corporation](/usc/12/1451.md?p=b) may not implement any new program (as such term is defined in [section 4502 of this title](/usc/12/4502.md)) before obtaining the approval of the [Secretary](/usc/12/1715z–22a.md?p=4) under [section 4542](/usc/12/4542.md)[^1] of this title.
- (d) **Use of credit scores as condition for approval of residential mortgages—**
  - (1) **Definition—** In this subsection, the term “[credit](/usc/12/5481.md?p=7) score” means a numerical value or a categorization created by a third party derived from a statistical tool or modeling system used by a [person](/usc/12/5481.md?p=19) who makes or arranges a loan to predict the likelihood of certain [credit](/usc/12/5481.md?p=7) behaviors, including default.
  - (2) **Use of credit scores—** The [Corporation](/usc/12/1451.md?p=b) shall condition purchase of a [residential mortgage](/usc/12/1451.md?p=h) by the [Corporation](/usc/12/1451.md?p=b) under this section on the provision of a [credit](/usc/12/5481.md?p=7) score for the borrower only if—
    - (A) the [credit](/usc/12/5481.md?p=7) score is derived from any [credit](/usc/12/5481.md?p=7) scoring model that has been validated and approved by the [Corporation](/usc/12/1451.md?p=b) under this subsection; and
    - (B) the [Corporation](/usc/12/1451.md?p=b) provides for the use of the [credit](/usc/12/5481.md?p=7) score by all of the automated underwriting systems of the [Corporation](/usc/12/1451.md?p=b) and any other procedures and systems used by the [Corporation](/usc/12/1451.md?p=b) to purchase [residential mortgages](/usc/12/1451.md?p=h) that use a [credit](/usc/12/5481.md?p=7) score.
  - (3) **Validation and approval process—** The [Corporation](/usc/12/1451.md?p=b) shall establish a validation and approval process for the use of [credit](/usc/12/5481.md?p=7) score models, under which the [Corporation](/usc/12/1451.md?p=b) may not validate and approve a [credit](/usc/12/5481.md?p=7) score model unless the [credit](/usc/12/5481.md?p=7) score model—
    - (A) satisfies minimum requirements of integrity, reliability, and accuracy;
    - (B) has a historical record of measuring and predicting default rates and other [credit](/usc/12/5481.md?p=7) behaviors;
    - (C) is consistent with the safe and sound operation of the [corporation](/usc/12/1451.md?p=b);
    - (D) complies with any standards and criteria established by the [Director](/usc/12/5481.md?p=10) of the Federal Housing Finance Agency under [section 4548(1) of this title](/usc/12/4548.md?p=1); and
    - (E) satisfies any other requirements, as determined by the [Corporation](/usc/12/1451.md?p=b).
  - (4) **Replacement of credit score model—** If the [Corporation](/usc/12/1451.md?p=b) has validated and approved 1 or more [credit](/usc/12/5481.md?p=7) score models under [paragraph (3)](#d-3) and the [Corporation](/usc/12/1451.md?p=b) validates and approves an additional [credit](/usc/12/5481.md?p=7) score model, the [Corporation](/usc/12/1451.md?p=b) may determine that—
    - (A) the additional [credit](/usc/12/5481.md?p=7) score model has replaced the [credit](/usc/12/5481.md?p=7) score model or [credit](/usc/12/5481.md?p=7) score models previously validated and approved; and
    - (B) the [credit](/usc/12/5481.md?p=7) score model or [credit](/usc/12/5481.md?p=7) score models previously validated and approved shall no longer be considered validated and approved for the purposes of [paragraph (2)](#d-2).
  - (5) **Public disclosure—** Upon establishing the validation and approval process required under [paragraph (3)](#d-3), the [Corporation](/usc/12/1451.md?p=b) shall make publicly available a description of the validation and approval process.
  - (6) **Application—** Not later than 30 days after the effective date of this subsection, the [Corporation](/usc/12/1451.md?p=b) shall solicit applications from developers of [credit](/usc/12/5481.md?p=7) scoring models for the validation and approval of those models under the process required under [paragraph (3)](#d-3).
  - (7) **Timeframe for determination; notice—**
    - (A) **In general—** The [Corporation](/usc/12/1451.md?p=b) shall make a determination with respect to any application submitted under [paragraph (6)](#d-6), and provide notice of that determination to the applicant, before a date established by the [Corporation](/usc/12/1451.md?p=b) that is not later than 180 days after the date on which an application is submitted to the [Corporation](/usc/12/1451.md?p=b).
    - (B) **Extensions—** The [Director](/usc/12/5481.md?p=10) of the Federal Housing Finance Agency may authorize not more than 2 extensions of the date established under [subparagraph (A)](#d-7-A), each of which shall not exceed 30 days, upon a written request and a showing of good cause by the [Corporation](/usc/12/1451.md?p=b).
    - (C) **Status notice—** The [Corporation](/usc/12/1451.md?p=b) shall provide notice to an applicant regarding the status of an application submitted under [paragraph (6)](#d-6) not later than 60 days after the date on which the application was submitted to the [Corporation](/usc/12/1451.md?p=b).
    - (D) **Reasons for disapproval—** If an application submitted under [paragraph (6)](#d-6) is disapproved, the [Corporation](/usc/12/1451.md?p=b) shall provide to the applicant the reasons for the disapproval not later than 30 days after a determination is made under this paragraph.
  - (8) **Authority of Director—** If the [Corporation](/usc/12/1451.md?p=b) elects to use a [credit](/usc/12/5481.md?p=7) score under this subsection, the [Director](/usc/12/5481.md?p=10) of the Federal Housing Finance Agency shall require the [Corporation](/usc/12/1451.md?p=b) to periodically review the validation and approval process required under [paragraph (3)](#d-3) as the [Director](/usc/12/5481.md?p=10) determines necessary to ensure that the process remains appropriate and adequate and complies with any standards and criteria established pursuant to [section 4548(1) of this title](/usc/12/4548.md?p=1).
  - (9) **Extension—** If, as of the effective date of this subsection, a [credit](/usc/12/5481.md?p=7) score model has not been approved under [paragraph (3)](#d-3), the [Corporation](/usc/12/1451.md?p=b) may use a [credit](/usc/12/5481.md?p=7) score model that was in use before the effective date of this subsection, if necessary to prevent substantial market disruptions, until the earlier of—
    - (A) the date on which a [credit](/usc/12/5481.md?p=7) score model is validated and approved under [paragraph (3)](#d-3); or
    - (B) the date that is 2 years after the effective date of this subsection.

## Footnotes

[^1]: See References in Text note below.

## Source credit

(Pub. L. 91–351, title III, § 305, July 24, 1970, 84 Stat. 454; Pub. L. 93–383, title VIII, § 805(a), (b), Aug. 22, 1974, 88 Stat. 726; Pub. L. 93–495, title I, § 113, Oct. 28, 1974, 88 Stat. 1506; Pub. L. 95–128, title IV, § 408(b), Oct. 12, 1977, 91 Stat. 1138; Pub. L. 95–557, title III, § 321(a), (b), Oct. 31, 1978, 92 Stat. 2101; Pub. L. 96–294, title V, § 534(a)(1), June 30, 1980, 94 Stat. 740; Pub. L. 96–399, title III, § 313(b), Oct. 8, 1980, 94 Stat. 1644; Pub. L. 97–110, title II, §§ 202(a), (b)(1), 203, Dec. 26, 1981, 95 Stat. 1514, 1515; Pub. L. 98–440, title II, §§ 201(b), 203(b)(2), 205(b), 206(b), Oct. 3, 1984, 98 Stat. 1693–1696; Pub. L. 100–122, § 2(b)(2), Sept. 30, 1987, 101 Stat. 793; Pub. L. 100–154, Nov. 5, 1987, 101 Stat. 890; Pub. L. 100–170, Nov. 17, 1987, 101 Stat. 914; Pub. L. 100–179, Dec. 3, 1987, 101 Stat. 1018; Pub. L. 100–200, Dec. 21, 1987, 101 Stat. 1327; Pub. L. 100–242, title IV, §§ 443(b), 445, Feb. 5, 1988, 101 Stat. 1922; Pub. L. 100–628, title X, § 1068(b), Nov. 7, 1988, 102 Stat. 3726; Pub. L. 101–73, title VII, § 731(e), (f)(2), Aug. 9, 1989, 103 Stat. 433; Pub. L. 102–550, title XIII, § 1382(j)–(m), Oct. 28, 1992, 106 Stat. 4004; Pub. L. 105–276, title II, § 202(a), title V, § 582(a)(14), Oct. 21, 1998, 112 Stat. 2483, 2644; Pub. L. 105–277, div. A, § 122, Oct. 21, 1998, 112 Stat. 2681–546; Pub. L. 110–289, div. A, title I, § 1124(b)(1), (2), July 30, 2008, 122 Stat. 2692; Pub. L. 115–174, title III, § 310(b), May 24, 2018, 132 Stat. 1353.)

## Notes

### Editorial Notes

### References in Text

The National Housing Act, referred to in subsec. (a)(1), is act June 27, 1934, ch. 847, 48 Stat. 1246, which is classified principally to chapter 13 (§ 1701 et seq.) of this title. For complete classification of this Act to the Code, see section 1701 of this title and Tables.

This chapter, referred to in subsec. (a)(1), was in the original “this Act” and has been translated as reading “this title”, meaning title III of Pub. L. 91–351, to reflect the probable intent of Congress.

The effective date of the Federal Housing Finance Regulatory Reform Act of 2008, referred to in subsec. (a)(2), probably means the date of enactment of div. A of Pub. L. 110–289, which was approved July 30, 2008.

Section 4542 of this title, referred to in subsec. (c), was repealed and a new section 4542 was added by Pub. L. 110–289, div. A, title I, §§ 1121(2), 1124(d), July 30, 2008, 122 Stat. 2689, 2693. The new section 4542 does not relate to obtaining the approval of the Secretary.

The effective date of this subsection, referred to in subsec. (d)(6), (9), is 180 days after May 24, 2018, see section 310(d) of Pub. L. 115–174, set out as an Effective Date of 2018 Amendment note below.

### Amendments

2018—Subsec. (d). Pub. L. 115–174 added subsec. (d).

2008—Subsec. (a)(2). Pub. L. 110–289 substituted “Such limitations shall not exceed $417,000 for a mortgage secured by a single-family residence, $533,850 for a mortgage secured by a 2-family residence, $645,300 for a mortgage secured by a 3-family residence, and $801,950 for a mortgage secured by a 4-family residence, except that such maximum limitations shall be adjusted effective January 1 of each year beginning after the effective date of the Federal Housing Finance Regulatory Reform Act of 2008, subject to the limitations in this paragraph. Each adjustment shall be made by adding to each such amount (as it may have been previously adjusted) a percentage thereof equal to the percentage increase, during the most recent 12-month or 4-quarter period ending before the time of determining such annual adjustment, in the housing price index maintained by the Director of the Federal Housing Finance Agency (pursuant to section 4542 of this title). If the change in such house price index during the most recent 12-month or 4-quarter period ending before the time of determining such annual adjustment is a decrease, then no adjustment shall be made for the next year, and the next adjustment shall take into account prior declines in the house price index, so that any adjustment shall reflect the net change in the house price index since the last adjustment. Declines in the house price index shall be accumulated and then reduce increases until subsequent increases exceed prior declines.” for “Such limitations shall not exceed $93,750 for a mortgage secured by a single-family residence, $120,000 for a mortgage secured by a two-family residence, $145,000 for a mortgage secured by a three-family residence, and $180,000 for a mortgage secured by a four-family residence, except that such maximum limitations shall be adjusted effective January 1 of each year beginning with 1981. Each such adjustment shall be made by adding to each such amount (as it may have been previously adjusted) a percentage thereof equal to the percentage increase during the twelve-month period ending with the previous October in the national average one-family house price in the monthly survey of all major lenders conducted by the Federal Housing Finance Board.” and inserted last sentence.

1998—Subsec. (a)(2). Pub. L. 105–276, § 582(a)(14), struck out penultimate sentence which read as follows: “With respect to mortgages secured by property comprising five or more family dwelling units, such limitations shall not exceed 125 per centum of the dollar amounts set forth in section 207(c)(3) of the National Housing Act, except that such limitations may be increased by the Corporation (taking into account construction costs) to not to exceed 240 per centum of such dollar amounts in any geographical area for which the Secretary of Housing and Urban Development determines under such section that cost levels require any increase in the dollar amount limitations under such section.”

Pub. L. 105–276, § 202(a), which directed the amendment of the first sentence of par. (2) by striking out “or” at end of cl. (B) and substituting “; or (D) the mortgage is subject to default loss protection that the Corporation determines is financially equal or superior, on an individual or pooled basis, to the protection provided by clause (C) of this sentence: Provided, That if the Director of the Office of Federal Housing Enterprise Oversight subsequently finds that such default loss protection determined by the Corporation does not provide such equal or superior protection, the Corporation shall provide such additional default loss protection for such mortgage, as approved by the Director of the Office of Federal Housing Enterprise Oversight, necessary to provide such equal or superior protection.” for the period at end, was repealed by Pub. L. 105–277, effective upon enactment of Pub. L. 105–276.

1992—Subsec. (a)(1). Pub. L. 102–550, § 1382(j), in first sentence, substituted a period for “from any Federal home loan bank, the Resolution Trust Corporation, the Federal Deposit Insurance Corporation, the National Credit Union Administration, any member of a Federal home loan bank, or any other financial institution the deposits or accounts of which are insured by an agency of the United States, or from any financial institution the deposits or accounts of which are insured under the laws of any State if the total amount of time and savings deposits held in all such institutions in that State is more than 20 per centum of the total amount of such deposits in all banks, building and loan, savings and loan, and homestead associations (including cooperative banks) in that State or from any mortgagee approved by the Secretary of Housing and Urban Development for participation in any mortgage insurance program under the National Housing Act or from any public utility carrying out activities in accordance with the requirements of title II of the National Energy Conservation Policy Act if the residential mortgage to be purchased is a loan or advance of credit the original proceeds of which are applied for in order to finance the purchase and installation of residential energy conservation measures (as defined in section 210(11) of the National Energy Conservation Policy Act) in residential real estate.” and in second sentence, substituted a period for “, and the servicing on any such mortgage may be performed by the seller or by a financial institution qualified as a seller under the provisions of the preceding sentence, or by a mortgagee approved by the Secretary of Housing and Urban Development for participation in any mortgage insurance program under the National Housing Act, with which institution or mortgagee the seller may contract.”

Subsec. (a)(2). Pub. L. 102–550, § 1382(k), substituted “Hawaii, and the Virgin Islands” for “and Hawaii” in last sentence.

Subsec. (c). Pub. L. 102–550, § 1382(l), (m), added subsec. (c) and struck out former subsec. (c) which read as follows: “The Board of Directors may not impose any annual limitation on the maximum aggregate principal amount of mortgages purchased by the Corporation.”

1989—Subsec. (a)(1). Pub. L. 101–73, § 731(e)(1), (f)(2)(A), substituted “Resolution Trust Corporation” for “Federal Savings and Loan Insurance Corporation” and inserted at end “Nothing in this section authorizes the Corporation to impose any charge or fee upon any mortgagee approved by the Secretary of Housing and Urban Development for participation in any mortgage insurance program under the National Housing Act solely because of such status.”

Subsec. (a)(2). Pub. L. 101–73, § 731(f)(2), substituted “Resolution Trust Corporation” for “Federal Savings and Loan Insurance Corporation” and “Federal Housing Finance Board” for “Federal Home Loan Bank Board”.

Subsec. (a)(5). Pub. L. 101–73, § 731(e)(2), added par. (5).

Subsec. (b). Pub. L. 101–73, § 731(f)(2)(A), substituted “Resolution Trust Corporation” for “Federal Savings and Loan Insurance Corporation”.

1988—Subsec. (a)(4)(A)(i). Pub. L. 100–242, § 443(b), struck out “through March 15, 1988,” before “residential mortgages”.

Subsec. (a)(4)(A)(ii). Pub. L. 100–628 struck out “until October 1, 1985,” before “residential mortgages”.

Subsec. (c). Pub. L. 100–242, § 445, added subsec. (c).

1987—Subsec. (a)(4)(A)(i). Pub. L. 100–200 substituted “March 15, 1988” for “December 16, 1987”.

Pub. L. 100–179 substituted “December 16, 1987” for “December 2, 1987”.

Pub. L. 100–170 substituted “December 2, 1987” for “November 15, 1987”.

Pub. L. 100–154 substituted “November 15, 1987” for “October 31, 1987”.

Pub. L. 100–122 substituted “through October 31, 1987” for “until October 1, 1987”.

1984—Subsec. (a)(2). Pub. L. 98–440, § 205(b), which directed insertion of “secured by a property comprising one- to four-family dwelling units” after “mortgages” where first appearing in first sentence was executed by inserting that phrase after “No conventional mortgage” as the probable intent of Congress.

Pub. L. 98–440, § 201(b), substituted “The Corporation shall establish limitations governing the maximum original principal obligation of conventional mortgages that are purchased by it; in any case in which the Corporation purchases a participation interest in such a mortgage, the limitation shall be calculated with respect to the total original principal obligation of the mortgage and not merely with respect to the interest purchased by the Corporation” for “The Corporation shall establish limitations governing the maximum principal obligation of conventional mortgages purchased by it”.

Pub. L. 98–440, § 206(b), inserted provision that the limitations set forth in section 1713(c)(3) of this title may be increased by the Corporation (taking into account construction costs) to not to exceed 240 per centum of such dollar amounts in any geographical area for which the Secretary of Housing and Urban Development determines under such section that cost levels required any increase in the dollar amount limitations under such section.

Subsec. (a)(4). Pub. L. 98–440, § 203(b)(2), added par. (4).

1981—Subsec. (a)(1). Pub. L. 97–110, § 203, added the Federal Deposit Insurance Corporation and the National Credit Union Administration to the enumeration of agencies from which the Federal Home Loan Mortgage Corporation is authorized to purchase residential mortgages.

Subsec. (a)(2). Pub. L. 97–110, § 202(a), substituted provisions authorizing the Corporation to purchase a conventional mortgage which was originated more than one year prior to the purchase date only if the seller is the Federal Deposit Insurance Corporation, the Federal Savings and Loan Insurance Corporation, the National Credit Union Administration, or any other seller currently engaged in mortgage lending or investing activities for provisions which had authorized the Corporation to purchase a conventional mortgage which was originated more than one year prior to the purchase date only if the seller was currently engaged in mortgage lending or investing activities and if, as a result thereof, the cumulative aggregate of the principal balances of all conventional mortgages purchased by the Corporation which were originated more than one year prior to the date of purchases did not exceed 20 per centum of the cumulative aggregate of the principal balances of all conventional mortgages purchased by the Corporation.

Pub. L. 97–110, § 202(b)(1), inserted provision that, with respect to any transaction in which a seller contemporaneously sells mortgages originated more than one year old prior to the date of sale to the Corporation and receives in payment for such mortgages securities representing undivided interests only in those mortgages, the Corporation shall not impose any fee or charge upon an eligible seller which is not a member of a Federal Home Loan Bank which differs from that imposed upon an eligible seller which is such a member.

Subsec. (b). Pub. L. 97–110, § 203, added the Federal Deposit Insurance Corporation and the National Credit Union Administration to the enumeration of agencies having the authority to enter into and to perform and carry out transactions and matters referred to in this section.

1980—Subsec. (a)(1). Pub. L. 96–294 inserted provisions relating to public utilities carrying out activities in accordance with the requirements of title II of the National Energy Conservation Policy Act.

Subsec. (a)(2). Pub. L. 96–399 inserted provisions setting forth limitations respecting mortgages secured by a single-family residence, etc., and struck out provisions making the limitations set forth in first proviso of first sentence of section 1464(c) of this title.

1978—Subsec. (a)(1). Pub. L. 95–557 inserted reference to any mortgagee approved by the Secretary of Housing and Urban Development at end of first sentence, and inserted last five sentences relating to imposition of charges or fees for different classes of sellers or servicers, etc.

1977—Subsec. (a)(2). Pub. L. 95–128 inserted “by more than 25 per centum” after “exceed” in last sentence.

1974—Subsec. (a)(1). Pub. L. 93–495 inserted provisions relating to State insurance of deposits or accounts in financial institutions.

Pub. L. 93–383, § 805(a), substituted “. The Corporation may hold” for “, and to hold” and inserted provisions relating to the servicing of any such mortgage by the seller or qualified financial institution.

Subsec. (a)(2). Pub. L. 93–383, § 805(b), substituted “80” for “75” in two places and “not exceed 20” for “not exceed 10”, struck out “private” before “insurer” in cl. (C), and substituted provisions relating to limitations contained in first proviso of first sentence of section 1464(c) of this title, for provisions relating to limitations applicable if the mortgage were insured by the Secretary under section 1709(b) or 1713 of this title.

### Statutory Notes and Related Subsidiaries

### Effective Date of 2018 Amendment

Pub. L. 115–174, title III, § 310(d), May 24, 2018, 132 Stat. 1355, provided that: “The amendments made by subsections (a) and (b) [amending this section and section 1717 of this title] shall take effect on the date that is 180 days after the date of enactment of this Act [May 24, 2018].”

### Effective Date of 2008 Amendment

Pub. L. 110–289, div. A, title I, § 1124(b)(3), July 30, 2008, 122 Stat. 2693, provided that: “The amendments made by paragraphs (1) and (2) of this subsection [amending this section] shall take effect upon the expiration of the date described in section 201(a) of the Economic Stimulus Act of 2008 (Public Law 110–185) [122 Stat. 619; probably means Dec. 31, 2008].”

### Effective Date of 1998 Amendments

Pub. L. 105–277, div. A, § 122, Oct. 21, 1998, 112 Stat. 2681–546, provided that the amendment made by section 122 is effective upon enactment of Pub. L. 105–276 (Oct. 21, 1998).

Amendment by title V of Pub. L. 105–276 effective and applicable beginning upon Oct. 1, 1999, except as otherwise provided, with provision that Secretary may implement amendment before such date, except to extent that such amendment provides otherwise, and with savings provision, see section 503 of Pub. L. 105–276, set out as a note under section 1437 of Title 42, The Public Health and Welfare.

### Effective Date of 1981 Amendment

Pub. L. 97–110, title II, § 202(b)(2), Dec. 26, 1981, 95 Stat. 1514, provided that: “The amendment made by paragraph (1) [amending this section] shall take effect on January 1, 1982, and shall apply to commitments entered into on or after such date.”

### Effective Date of 1978 Amendment

Pub. L. 95–557, title III, § 321(c), Oct. 31, 1978, 92 Stat. 2102, provided: “The amendments made by this section [amending this section] shall become effective at the end of the two hundred and ten calendar days after enactment of this Act [Oct. 31, 1978], but not before January 31, 1979, or on such earlier date as the Federal Home Loan Mortgage Corporation may prescribe.”

### Savings Provision

Pub. L. 105–276, title V, § 582(b), Oct. 21, 1998, 112 Stat. 2644, provided that: “Except to the extent otherwise provided in this Act [see Tables for classification], the repeals made by subsection (a) [amending this section and section 1717 of this title, repealing sections 1437a–1, 1437j–1, 1438, and 11903a of Title 42, The Public Health and Welfare, amending provisions set out as a note under section 1437f of Title 42, and repealing provisions set out as notes under section 1701z–6 of this title and sections 1437f, 1437g, and 1437t of Title 42] shall not affect any legally binding obligations entered into before the effective date under section 503(a) of this Act [set out as a note under section 1437 of Title 42].”