Prohibition on sale or provision of Federally backed mortgage loans to certain investors

(a) Definitions In this section: (1) Covered entity The term covered entity means— (A) the Department of Housing and Urban Development, including the Federal Housing Administration and the Government National Mortgage Association; (B) the Department of Veterans Affairs; (C) the Department of Agriculture; (D) the Federal National Mortgage Association; (E) the Federal National Mortgage Corporation; and (F) any other Federal agency that is selling or otherwise disposing of covered residential property. (2) Covered residential property The term covered residential property — (A) means residential real property or a manufactured housing community; and (B) does not include— (i) Federally assisted housing, as defined in section 579 of the Quality Housing and Work Responsibility Act of 1998 (42 U.S.C. 13664); or (ii) any residential property that uses tax credits under section 42 of the Internal Revenue Code of 1986. (3) Federally backed mortgage loan The term Federally backed mortgage loan has the meaning given the term in section 4022(a) of the CARES Act (15 U.S.C. 9056(a)). (4) Institutional investment entity; large owner The terms institutional investment entity and large owner have the meanings given those terms in subparagraphs (A) and (B)(i) of section 163(n)(7) of the Internal Revenue Code of 1986, as added by this Act. (5) Manufactured housing community The term manufactured housing community means a residential real estate development with lots on which factory-built homes, including manufactured homes (as defined in section 603 of the National Manufactured Housing Construction and Safety Standards Act of 1974 (42 U.S.C. 5402)), are located, together with supporting infrastructure. (6) Residential real property The term residential real property has the meaning given the term in section 1004 of the Residential Lead-Based Paint Hazard Reduction Act of 1992 (42 U.S.C. 4851b). (b) Prohibition on sale A covered entity may not sell or otherwise dispose of Federally backed mortgage loans or covered residential properties to a large owner or an institutional investment entity, including a loan or property that is— (1) a nonperforming or re-performing loan; (2) a foreclosed home; (3) a real estate-owned property; or (4) any other real estate-related asset held by the covered entity. (c) Prohibition on financing (1) In general A covered entity may not issue, insure, guarantee, or securitize any mortgage loan where the borrower is a large owner or an institutional investment entity, unless the mortgage loan is related to— (A) the construction or rehabilitation of housing with affordability use restrictions; or (B) the refinance of existing loans related to such housing, and such refinance will not result in the elimination of affordability use restrictions. (2) Application The prohibition under paragraph (1) shall not apply with respect to a mortgage loan that is issued, insured, guaranteed, or securitized before the date of enactment of this Act.