H.R. 4568

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4568 Introduced in House (IH)]

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119th CONGRESS
1st Session
H. R. 4568

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 21, 2025

Mr. Liccardo (for himself, Mr. Garbarino, 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, Mr. Harder of California, Mr. Meeks, 
Ms. Ansari, Mr. Foster, and Mr. Costa) 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. SHORT TITLE.

This Act may be cited as the ``Supporting Upgraded Property 
Projects and Lending for Yards (SUPPLY) Act''.

SEC. 2. 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. 3. 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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