An act to amend the Securities Exchange Act of 1934 with respect to the treatment of mortgage backed securities, to increase the authority of the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation, and for other purposes.

(Measure passed House, amended) Secondary Mortgage Market Enhancement Act of 1983 - Title I: Securities Laws Amendments - Defines "mortgage related security" for purposes of the Securities Exchange Act of 1934. Exempts from certain requirements and restrictions of such Act a bona fide agreement for delayed delivery (forward trading) of a mortgage related security against full payment upon delivery within 180 days (or any shorter time prescribed by the Federal Reserve Board). Declares, with respect to margin requirements, that, subject to Federal Reserve Board rules and regulations, no member of a national securities exchange, dealer, or broker shall be deemed to have extended, maintained, or otherwise arranged credit for the purchase of a security by reason of such an agreement. Declares, with respect to restrictions on borrowing and lending by members, dealers, or brokers, that, subject to Federal Reserve Board rules and regulations, no person shall be deemed to have borrowed within the ordinary course of business by reason of such an agreement. Amends the Home Owner's Loan Act of 1933 and the Federal Credit Union Act to allow federally-chartered financial institutions, including credit unions, to invest in mortgage-related securities subject only to limitations that the appropriate regulating board might impose. Preempts State blue sky and legal investment laws and regulations so that investment grade mortgage-related securities may be purchased by State-chartered and regulated financial institutions, insurance companies, pension funds, trustees, or other regulated entities. Permits a State to reassert limitations on investments in mortgage securities within seven years of enactment of these provisions if it finds such regulation necessary. Title II: Secondary Mortgage Market Programs - Amends the Federal National Mortgage Association Charter Act and the Federal Home Loan Mortgage Corporation Act to require the limitation on the maximum principal obligation of a conventional mortgage, in which the FNMA or the Federal Home Loan Mortgage Corporation (FHLMC) may purchase a participating interest, to be calculated with respect to the total principal obligation of the mortgage. Authorizes the FHLMC to purchase manufactured home loans, whether secured by personal, real, or mixed property. Authorizes such corporations: (1) until October 1, 1987, to purchase mortgages secured by a subordinate lien against a one- to four-family dwelling; and (2) until October 1, 1985, to purchase mortgages on properties comprising five or more family dwelling units. Specifies limitations on the maximum principal obligation of the mortgages. Permits the FHLMC to purchase mortgages insured by State agencies. Removes existing loan-to-value limits on multifamily mortgage purchases. Raises the limit on FNMA and FHLMC multifamily conventional mortgage purchases. Expands the FNMA Board of Directors from 15 to 18 members. Requires an annual Department of Housing and Urban Development (HUD) report regarding FNMA's activities. Establishes a 45-day (with a 15-day extension) HUD approval period for FNMA requests. Provides that the FHLMC may not guarantee mortgage-backed securities or mortgage-related securities backed by mortgages not purchased by the FHLMC. Sets forth standards for FHLMC for issuing preferred stock. Requires the Secretary of Housing and Urban Development to do a study on mortgage prepayment penalties and the impact on the secondary market. Terminates the Secretary's general authority to approve issuance of all FNMA obligations on September 30, 1985. Restricts the Secretary's approval of FNMA obligations to issuances of stock and of obligations convertible into stock.

Secondary Mortgage Market Enhancement Act of 1983 - Title I: Securities Laws Amendments - Amends the Securities Act of 1983 to exempt from the securities registration requirements securities backed by second mortgages, cooperative housing loans, and manufactured home loans. Expands the type of allowable security to include mortgage-related payment bonds. Exempts from the securities registration requirements securities originated by any Department of Housing and Urban Development approved mortgagee (principally mortgage bankers) in addition to financial institutions. Requires that the current minimum transaction amount of $250,000 be applied only to the initial purchase amount. Permits a 120 day time limit on the cash payment for the security (currently 60 days). Amends the Home Owner's Loan Act of 1933 and the Federal Credit Union Act to allow federally-chartered financial institutions, including credit unions, to invest in mortgage-related securities subject only to limitations that the appropriate regulating board might impose. Preempts State blue sky and legal investment laws and regulations so that investment grade mortgage-related securities may be purchased by State-chartered and regulated financial institutions, insurance companies, pension funds, trustees, or other regulated entities. Permits a State to reassert limitations on investments in mortgage securities within three years of enactment of these provisions if it finds such regulation necessary. Requires the Securities and Exchange Commission to provide a permanent procedure for the delayed or continuous registration of mortgage-backed securities. Title II: Federal Home Loan Mortgage Corporation and Federal National Mortgage Association Amendments - Amends the Federal Home Loan Mortgage Corporation Act and the National Housing Act to require that preferred stock issued by the Federal National Mortgage Association (Fannie Mae) or the Federal Home Loan Mortgage Corporation (Freddie Mac), other than preferred Freddie Mac stock sold to the Federal Home Loan Banks, include terms that would be required for New York Stock Exchange listing. States that participation agreement limitations on maximum principal obligation of conventional mortgages shall apply to an entire mortgage regardless of whether Freddie Mac and Fannie Mae purchase the entire loan or a participation interest therein. Permits Freddie Mac to purchase manufactured home loans where the property securing them is considered by State law as personal, or mixed personal and real (presently limited to real property security). Establishes a 45-day (with a 15-day extension) Department of Housing and Urban Development (HUD) approval period for Fannie Mae requests. Removes existing loan-to-value limits on multifamily mortgage purchases. Expands Fannie Mae's Board of Directors from 15 to 18 members. Raises the limit on Freddie Mac and Fannie Mae multifamily conventional mortgage purchases. Requires an annual HUD report regarding Fannie Mae's activities. Authorizes Freddie Mac and Fannie Mae to purchase residential second mortgages through October 1, 1985. Sets forth loan limits and related provisions.