[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 2239 Introduced in Senate (IS)]
107th CONGRESS
2d Session
S. 2239
To amend the National Housing Act to simplify the downpayment
requirements for FHA mortgage insurance for single family homebuyers.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
April 24, 2002
Mr. Sarbanes (for himself, Mr. Ensign, Mr. Schumer, Mr. Corzine, Mr.
Allard, Mr. Carper, Mr. Bunning, Mrs. Clinton, Mr. Torricelli, and Mr.
Santorum) introduced the following bill; which was read twice and
referred to the Committee on Banking, Housing, and Urban Affairs
_______________________________________________________________________
A BILL
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; and
(II) by striking the sixth sentence
(relating to the increases for costs of
solar energy systems) and all that
follows through the end of the last
undesignated paragraph (relating to
disclosure notice); 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,''.
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