[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 2239 Referred in House (RFH)]
2d Session
S. 2239
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
October 21, 2002
Referred to the Committee on Financial Services
_______________________________________________________________________
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:
JERI THOMSON,
Secretary.