I 111th CONGRESS 1st Session H. R. 3706 IN THE HOUSE OF REPRESENTATIVES October 1, 2009 Mr. Garrett of New Jersey introduced the following bill; which was referred to the Committee on Financial Services A BILL To require borrowers under FHA-insured mortgages for single-family housing to make downpayments of at least 5 percent and to prohibit financing of closing costs under such mortgages.

1.

Short title

This Act may be cited as the FHA Taxpayer Protection Act of 2009.

2.

Downpayment requirement of 5 percent and prohibition of financing of closing costs

Section 203 of the National Housing Act (12 U.S.C. 1709) is amended— (1)in subsection (b)(9)(A), by striking 3.5 percent and inserting 5.0 percent; and (2)in subsections (b)(2) and (k)(3)(A), by striking (including such initial service charges, appraisal, inspection, and other fees as the Secretary shall approve) each place such term appears and inserting (which may not include any initial service charges, appraisal, inspection, or other fees or closing costs as the Secretary shall prohibit).

3.

GAO study of FHA financial soundness

The Comptroller General of the United States shall conduct a study of the Mutual Mortgage Insurance Fund and the mortgage insurance programs under which the insurance obligations are obligations of such Fund to determine— (1)the current financial state of the Fund; (2)the appropriate capital ratio (as such term is defined in section 205(f) of the National Housing Act (12 U.S.C. 1711(f)) that should be maintained for the Fund to ensure financial soundness of the Fund while making mortgage insurance available; (3)how the capital ratio of the Fund affects the mortgage insurance programs under the Fund and the exposure of the taxpayers for obligations of the Fund; (4)how the capital ratio of the Fund affects the broader housing market; and (5)the extent to which the housing markets are more dependent on mortgage insurance provided through the Fund since the financial crisis began in 2008. Not later than the expiration of the 90-day period beginning on the date of the enactment of this Act the Comptroller General shall submit a report to the Congress setting forth the results and conclusions of the study conducted under this section.