Loan guarantees for Native Hawaiian housing

Section 184A of the Housing and Community Development Act of 1992 (12 U.S.C. 1715z–13b) is amended— (1) in subsection (b), by inserting, and to expand homeownership opportunities to Native Hawaiian families who are eligible to receive a homestead under the Hawaiian Homes Commission Act, 1920 (42 Stat. 108) on fee simple lands in the State of Hawaii after markets; (2) in subsection (c)— (A) by amending paragraph (2) to read as follows: (2) Eligible housing The loan shall be used to construct, acquire, refinance, or rehabilitate 1- to 4-family dwellings that are standard housing.; (B) in paragraph (4)— (i) in subparagraph (B)— (I) by redesignating clause (iv) as clause (v); and (II) by adding after clause (iii) the following: (iv) Any other lender that is supervised, approved, regulated, or insured by any agency of the Federal Government, including any entity certified as a community development financial institution by the Community Development Financial Institutions Fund established under section 104(a) of the Riegle Community Development and Regulatory Improvement Act of 1994 (12 U.S.C. 4703(a)).; and (ii) by adding at the end the following: (C) Direct guarantee endorsement and indemnification (i) In general If the Secretary determines that a loan guaranteed under this section was not originated in accordance with the requirements established by the Secretary, the Secretary may require the lender approved under this paragraph to indemnify the Secretary for the loss or potential loss, irrespective of whether the violation caused or will cause the loan default. (ii) Direct guarantee endorsement The Secretary may, dependent on the availability of systems development and staffing resources, delegate to eligible lenders the authority to directly endorse loans under this section. (iii) Fraud or misrepresentation If fraud or misrepresentation is involved in a loan guaranteed under this section, the Secretary may require the originating lender approved under this subparagraph to indemnify the Secretary for the loss regardless of whether there was a payment made by the Secretary under the guarantee. (iv) Implementation The Secretary may implement any requirements described in this subparagraph by regulation, notice, or Dear Lender Letter.; (C) in paragraph (5)(A), by inserting before the semicolon at the end the following: except, as determined by the Secretary, when there is a loan modification under subsection (i)(1)(B), the term of the loan shall not exceed 40 years; and (D) by adding at the end the following: (6) Review of lenders (A) In general The Secretary may periodically review the lenders originating, underwriting, or servicing single family mortgage loans under this section. (B) Requirements In conducting a review under subparagraph (A), the Secretary— (i) shall compare the lender with other lenders originating or underwriting loan guarantees for Indian housing and Native Hawaiian housing based on the rates of defaults and claims for guaranteed loans originated, underwritten, or serviced by that lender; (ii) may compare the lender with such other lenders based on underwriting quality, geographic area served, or any commonly used factors the Secretary determines necessary for comparing mortgage default risk, provided that the comparison is of factors that the Secretary would expect to affect the default risk of mortgage loans guaranteed by the Secretary; (iii) shall implement the comparisons described in clauses (i) and (ii) by regulation, notice, or Dear Lender Letter; and (iv) may terminate the approval of a lender to originate, underwrite, or service loan guarantees for housing under this section if the Secretary determines that the mortgage loans originated, underwritten, or serviced by the lender present an unacceptable risk to the Hawaiian Housing Loan Guarantee Fund established under subsection (j)— (I) based on a comparison of any of the factors set forth in this subparagraph; or (II) by a determination that the lender engaged in fraud or misrepresentation.; (3) in subsection (d)— (A) in paragraph (1)— (i) in subparagraph (A), by striking Before and inserting Except as provided in subsection (C), before; (ii) in subparagraph (B), by striking If and inserting Except as provided under subparagraph (C), before; and (iii) by adding at the end the following: (C) Exception When the Secretary exercises its discretion to delegate direct guarantee endorsement authority pursuant to subsection (c)(4)(C)(ii), subparagraphs (A) and (B) of this paragraph shall not apply.; (B) by amending paragraph (2) to read as follows: (2) Standard for approval (A) Approval Except as provided in subparagraph (B), the Secretary may approve a loan for guarantee under this section and issue a certificate under this subsection only if the Secretary determines that there is a reasonable prospect of repayment of the loan. (B) Exceptions When the Secretary exercises its discretion to delegate direct guarantee endorsement authority pursuant to subsection (c)(4)(C)(ii)— (i) subparagraph (A) shall not apply; and (ii) the direct guarantee endorsement lender may issue a certificate under this paragraph as evidence of the guarantee in accordance with requirements prescribed by the Secretary.; and (C) in paragraph (3)(A), by inserting or, where applicable, the direct guarantee endorsement lender, after Secretary; and (4) in subsection (j)(5)(B), by inserting after the first sentence the following: There are authorized to be appropriated for those costs such sums as may be necessary for each of fiscal years 2027 through 2033..