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






                                                       Calendar No. 703
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, Mr. 
 Santorum, Mr. Bayh, Mr. Reed, Ms. Stabenow, Mr. Harkin, Mr. Johnson, 
 Mr. Dodd, Mr. Hutchinson, Ms. Collins, Mr. Bingaman, Mr. Miller, Mr. 
 Dorgan, Mr. Stevens, Mr. Smith of Oregon, Mr. Domenici, and Mr. Enzi) 
introduced the following bill; which was read twice and referred to the 
            Committee on Banking, Housing, and Urban Affairs

                            October 15, 2002

               Reported by Mr. Sarbanes, with amendments
  [Omit the part struck through and insert the part printed in italic]

_______________________________________________________________________

                                 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; 
                                <DELETED>and
                                </DELETED>    (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
                                </DELETED>    (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.




                                                       Calendar No. 703

107th CONGRESS

  2d Session

                                S. 2239

_______________________________________________________________________

                                 A BILL

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

_______________________________________________________________________

                            October 15, 2002

                        Reported with amendments