[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 2239 Engrossed in Senate (ES)]

  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
107th CONGRESS
  2d Session
                                S. 2239

_______________________________________________________________________

                                 AN ACT


 
     To amend the National Housing Act to simplify the downpayment 
 requirements for FHA mortgage insurance for single family homebuyers.

    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 ``FHA Downpayment Simplification Act 
of 2002''.

SEC. 2. DOWNPAYMENT SIMPLIFICATION.

    Section 203 of the National Housing Act (12 U.S.C. 1709) is 
amended--
            (1) in subsection (b)--
                    (A) by striking ``shall--'' and inserting ``shall 
                comply with the following:'';
                    (B) in paragraph (2)--
                            (i) in subparagraph (A), in the matter that 
                        precedes clause (ii), by moving the margin 2 
                        ems to the right;
                            (ii) in the undesignated matter immediately 
                        following subparagraph (B)(iii)--
                                    (I) by striking the second and 
                                third sentences of such matter;
                                    (II) by striking the seventh 
                                sentence (relating to principal 
                                obligation) and all that follows 
                                through the end of the ninth sentence 
                                (relating to charges and fees); and
                                    (III) by striking the eleventh 
                                sentence (relating to disclosure 
                                notice) and all that follows through 
                                the end of the last undesignated 
                                paragraph (relating to disclosure 
                                notice requirements); and
                            (iii) by striking subparagraph (B) and 
                        inserting the following:
                    ``(B) not to exceed an amount equal to the sum of--
                            ``(i) the amount of the mortgage insurance 
                        premium paid at the time the mortgage is 
                        insured; and
                            ``(ii) in the case of--
                                    ``(I) a mortgage for a property 
                                with an appraised value equal to or 
                                less than $50,000, 98.75 percent of the 
                                appraised value of the property;
                                    ``(II) a mortgage for a property 
                                with an appraised value in excess of 
                                $50,000 but not in excess of $125,000, 
                                97.65 percent of the appraised value of 
                                the property;
                                    ``(III) a mortgage for a property 
                                with an appraised value in excess of 
                                $125,000, 97.15 percent of the 
                                appraised value of the property; or
                                    ``(IV) notwithstanding subclauses 
                                (II) and (III), a mortgage for a 
                                property with an appraised value in 
                                excess of $50,000 that is located in an 
                                area of the State for which the average 
                                closing cost exceeds 2.10 percent of 
                                the average, for the State, of the sale 
                                price of properties located in the 
                                State for which mortgages have been 
                                executed, 97.75 percent of the 
                                appraised value of the property.'';
                    (C) by transferring and inserting the text of 
                paragraph (10)(B) after the period at the end of the 
                first sentence of the undesignated paragraph that 
                immediately follows paragraph (2)(B) (relating to the 
                definition of ``area''); and
                    (D) by striking paragraph (10); and
            (2) by inserting after subsection (e), the following:
    ``(f) Disclosure of Other Mortgage Products.--
            ``(1) In general.--In conjunction with any loan insured 
        under this section, an original lender shall provide to each 
        prospective borrower a disclosure notice that provides a 1-page 
        analysis of mortgage products offered by that lender and for 
        which the borrower would qualify.
            ``(2) Notice.--The notice required under paragraph (1) 
        shall include--
                    ``(A) a generic analysis comparing the note rate 
                (and associated interest payments), insurance premiums, 
                and other costs and fees that would be due over the 
                life of the loan for a loan insured by the Secretary 
                under subsection (b) with the note rates, insurance 
                premiums (if applicable), and other costs and fees that 
                would be expected to be due if the mortgagor obtained 
                instead other mortgage products offered by the lender 
                and for which the borrower would qualify with a similar 
                loan-to-value ratio in connection with a conventional 
                mortgage (as that term is used in section 305(a)(2) of 
                the Federal Home Loan Mortgage Corporation Act (12 
                U.S.C. 1454(a)(2)) or section 302(b)(2) of the Federal 
                National Mortgage Association Charter Act (12 U.S.C. 
                1717(b)(2)), as applicable), assuming prevailing 
                interest rates; and
                    ``(B) a statement regarding when the requirement of 
                the mortgagor to pay the mortgage insurance premiums 
                for a mortgage insured under this section would 
                terminate, or a statement that the requirement shall 
                terminate only if the mortgage is refinanced, paid off, 
                or otherwise terminated.''.

SEC. 3. CONFORMING AMENDMENTS.

    Section 245 of the National Housing Act (12 U.S.C. 1715z-10) is 
amended--
            (1) in subsection (a), by striking ``, or if the 
        mortgagor'' and all that follows through ``case of veterans''; 
        and
            (2) in subsection (b)(3), by striking ``, or, if the'' and 
        all that follows through ``for veterans,''.

SEC. 4. REPEAL OF GNMA GUARANTEE FEE INCREASE.

    Section 972 of the Higher Education Amendments of 1998 (Public Law 
105-244; 112 Stat. 1837) is hereby repealed.

SEC. 5. INDEXING OF FHA MULTIFAMILY HOUSING LOAN LIMITS.

    (a) The National Housing Act (12 U.S.C. 1701 et seq.) is amended by 
inserting after section 206 the following new section 206A (12 U.S.C. 
1712A):

``SEC. 206A. INDEXING OF FHA MULTIFAMILY HOUSING LOAN LIMITS.

    ``(a) Method of Indexing.--The dollar amounts set forth in--
            ``(1) section 207(c)(3)(A) (12 U.S.C. 1713(c)(3)(A));
            ``(2) section 213(b)(2)(A) (12 U.S.C. 1715e(b)(2)(A));
            ``(3) section 220(d)(3)(B)(iii)(I) (12 U.S.C. 
        1715k(d)(3)(B)(iii)(I));
            ``(4) section 221(d)(3)(ii)(I) (12 U.S.C. 
        1715l(d)(3)(ii)(I));
            ``(5) section 221(d)(4)(ii)(I) (12 U.S.C. 
        1715l(d)(4)(ii)(I));
            ``(6) section 231(c)(2)(A) (12 U.S.C. 1715v(c)(2)(A)); and
            ``(7) section 234(e)(3)(A) (12 U.S.C. 1715y(e)(3)(A));
(collectively hereinafter referred to as the ``Dollar Amounts'') shall 
be adjusted annually (commencing in 2004) on the effective date of the 
Federal Reserve Board's adjustment of the $400 figure in the Home 
Ownership and Equity Protection Act of 1994 (HOEPA). The adjustment of 
the Dollar Amounts shall be calculated using the percentage change in 
the Consumer Price Index for All Urban Consumers (CPI-U) as applied by 
the Federal Reserve Board for purposes of the above-described HOEPA 
adjustment.
    ``(b) Notification.--The Federal Reserve Board on a timely basis 
shall notify the Secretary, or his designee, in writing of the 
adjustment described in subsection (a) and of the effective date of 
such adjustment in order to permit the Secretary to undertake 
publication in the Federal Register of corresponding adjustments to the 
Dollar Amounts. The dollar amount of any adjustment shall be rounded to 
the next lower dollar.''.
    (b) Technical and Conforming Changes.--(1) Section 207(c)(3) of the 
National Housing Act (12 U.S.C. 1713(c)(3)) is amended--
            (A) by inserting ``(A)'' after ``(3)'';
            (B) by striking ``and accept that the Secretary'' through 
        and including ``in this paragraph'' and inserting in lieu 
        thereof:
                    ``(B) the Secretary may, by regulation, increase 
                any of the dollar amount limitations in subparagraph 
                (A) (as such limitations may have been adjusted in 
                accordance with section 206A of this Act)''.
    (2) Section 213(b)(2) of the National Housing Act (12 U.S.C. 
1715e(b)(2)) is amended--
            (A) by inserting ``(A)'' following ``(2)'';
            (B) by striking ``: Provided further, That'' the first time 
        that it occurs, through and including ``contained in this 
        paragraph'' and inserting in lieu thereof: ``; (B)(i) the 
        Secretary may, by regulation, increase any of the dollar amount 
        limitations in subparagraph (A) (as such limitations may have 
        been adjusted in accordance with section 206A of this Act)'';
            (C) by striking ``: Provided further, That'' the second 
        time it occurs and inserting in lieu thereof: ``; and (ii)'';
            (D) by striking ``: And provided further, That'' and 
        inserting in lieu thereof'' ``; and (iii)'';
            (E) by striking ``with this subsection without regard to 
        the preceding proviso'' at the end of that subsection and 
        inserting in lieu thereof: ``with this subparagraph (B)(i).''.
    (3) Section 220(d)(3)(B)(iii) of the National Housing Act (12 
U.S.C. 1715k(d)(3)(B)(iii)) is amended--
            (A) by inserting ``(I)'' following ``(iii)'';
            (B) by striking ``design; and except that'' and inserting 
        in lieu thereof: ``design; and (II)'';
            (C) by striking ``any of the foregoing dollar amount 
        limitations contained in this clause'' and inserting in lieu 
        thereof: ``any of the dollar amount limitations in subparagraph 
        (B)(iii)(I) (as such limitations may have been adjusted in 
        accordance with section 206A of this Act)'';
            (D) by striking ``: Provided, That'' through and including 
        ``proviso'' and inserting in lieu thereof: ``with respect to 
        dollar amount limitations applicable to rehabilitation projects 
        described in subclause (II), the Secretary may, by regulation, 
        increase the dollar amount limitations contained in 
        subparagraph (B)(iii)(I) (as such limitations may have been 
        adjusted in accordance with section 206A of this Act)'';
            (E) by striking ``: Provided further,'' and inserting in 
        lieu thereof: ``; (III)'';
            (F) by striking ``subparagraph'' in the second proviso and 
        inserting in lieu thereof ``subparagraph (B)(iii)(I)'';
            (G) in the last proviso, by striking ``: And provided 
        further, That'' and all that follows through and including 
        ``this clause'' and inserting in lieu thereof: ``; (IV) with 
        respect to rehabilitation projects involving not more than five 
        family units, the Secretary may further increase any of the 
        dollar limitations which would otherwise apply to such 
        projects''.
    (4) Section 221(d)(3)(ii) of the National Housing Act (12 U.S.C. 
1715l(d)(3)(ii)) is amended--
            (A) by inserting ``(I)'' following ``(ii)'';
            (B) by striking ``; and except that'' and all that follows 
        through and including ``in this clause'' and inserting in lieu 
        thereof: ``; (II) the Secretary may, by regulation, increase 
        any of the dollar amount limitations in subclause (I) (as such 
        limitations may have been adjusted in accordance with section 
        206A of this Act)''.
    (5) Section 221(d)(4)(ii) of the National Housing Act (12 U.S.C. 
1715l(d)(4)(ii)) is amended--
                    (A) by inserting ``(I)'' following ``(ii)'';
                    (B) by striking ``; and except that'' and all that 
                follows through and including ``in this clause'' and 
                inserting in lieu thereof: ``; (II) the Secretary may, 
                by regulation, increase any of the dollar limitations 
                in subclause (I) (as such limitations may have been 
                adjusted in accordance with section 206A of this 
                Act)''.
    (6) Section 231(c)(2) of the National Housing Act (12 U.S.C. 
1715v(c)(2)) is amended--
            (A) by inserting ``(A)'' following ``(2)'';
            (B) by striking ``; and except that'' and all that follows 
        through and including ``in this paragraph'' and inserting in 
        lieu thereof: ``; (B) the Secretary may, by regulation, 
        increase any of the dollar limitations in subparagraph (A) (as 
        such limitations may have been adjusted in accordance with 
        section 206A of this Act)'';
            (C) by striking ``: Provided, That'' and all that follows 
        through and including ``of this section'' and inserting in lieu 
        thereof: ``; (C) the Secretary may, by regulation, increase any 
        of the dollar limitations in subparagraph (A) (as such 
        limitations may have been adjusted in accordance with section 
        206A of this Act)''.
    (7) Section 234(e)(3) of the National Housing Act (12 U.S.C. 
1715y(e)(3)) is amended--
            (A) by inserting ``(A)'' following ``(3)'';
            (B) by replacing ``$38,025'' with ``$42,048''; ``$42,120'' 
        with ``$48,481''; ``$50,310'' with ``$58,469''; ``$62,010'' 
        with ``$74,840''; ``$70,200'' with ``$83,375''; ``$43,875'' 
        with ``$44,250''; ``$49,140'' with ``$50,724''; ``$60,255'' 
        with ``$61,680''; ``$75,465'' with ``$79,793''; and ``$85,328'' 
        with ``$87,588'';
            (C) by striking ``; except that each'' and all that follows 
        through and including ``contained in this paragraph'' and 
        inserting in lieu thereof: ``; (B) the Secretary may, by 
        regulation, increase any of the dollar limitations in 
        subparagraph (A) (as such limitations may have been adjusted in 
        accordance with section 206A of this Act)''.

            Passed the Senate October 17, 2002.

            Attest:

                                                             Secretary.
107th CONGRESS

  2d Session

                                S. 2239

_______________________________________________________________________

                                 AN ACT

     To amend the National Housing Act to simplify the downpayment 
 requirements for FHA mortgage insurance for single family homebuyers.