[Congressional Record Volume 148, Number 138 (Monday, October 21, 2002)]
[Senate]
[Pages S10787-S10788]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




   OMITTED FROM THE RECORD PROCEEDINGS OF THURSDAY, OCTOBER 17, 2002

                                S. 2239

       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
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[[Page S10788]]

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)''.

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