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Disclosure of Adjustable Rate Mortgages (ARMs) Rates

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[Laws in effect as of January 7, 2003]

[Document not affected by Public Laws enacted between

January 7, 2003 and February 12, 2003]

[CITE: 12USC1709]


TITLE 12--BANKS AND BANKING

CHAPTER 13--NATIONAL HOUSING

SUBCHAPTER II--MORTGAGE INSURANCE

Sec. 1709. Insurance of mortgages



(a) Authorization


The Secretary is authorized, upon application by the mortgagee, to

insure as hereinafter provided any mortgage offered to him which is

eligible for insurance as hereinafter provided, and, upon such terms as

the Secretary may prescribe, to make commitments for the insuring of

such mortgages prior to the date of their execution or disbursement

thereon.


(b) Eligibility for insurance; mortgage limits


To be eligible for insurance under this section a mortgage shall--

(1) Have been made to, and be held by, a mortgagee approved by

the Secretary as responsible and able to service the mortgage

properly.

(2) Involve a principal obligation (including such initial

service charges, appraisal, inspection, and other fees as the

Secretary shall approve) in an amount--

(A) not to exceed the lesser of--

(i) in the case of a 1-family residence, 95 percent of

the median 1-family house price in the area, as determined

by the Secretary; in the case of a 2-family residence, 107

percent of such median price; in the case of a 3-family

residence, 130 percent of such median price; or in the case

of a 4-family residence, 150 percent of such median price;

or

(ii) 87 percent of the dollar amount limitation

determined under section 1454(a)(2) of this title for a

residence of the applicable size; except that the dollar

amount limitation in effect for any area under this

subparagraph may not be less than the greater of the dollar

amount limitation in effect under this section for the area

on October 21, 1998, or 48 percent of the dollar limitation

determined under section 1454(a)(2) of this title for a

residence of the applicable size; and


(B) except as otherwise provided in this paragraph (2), not

to exceed an amount equal to the sum of--

(i) 97 percent of $25,000 of the appraised value of the

property, as of the date the mortgage is accepted for

insurance;

(ii) 95 percent of such value in excess of $25,000 but

not in excess of $125,000; and

(iii) 90 percent of such value in excess of $125,000.


For purposes of the preceding sentence, the term ``area'' means a

metropolitan statistical area as established by the Office of

Management and Budget; and the median 1-family house price for an

area shall be equal to the median 1-family house price of the county

within the area that has the highest such median price. If the

mortgage to be insured under this section covers property on which

there is located a one- to four-family residence, and the appraised

value of the property, as of the date the mortgage is accepted for

insurance, does not exceed $50,000, the principal obligation may be

in an amount not to exceed 97 percent of such appraised value. If

the mortgagor is a veteran, and the mortgage to be insured under

this section covers property upon which there is located a dwelling

designed principally for a one-family residence, the principal

obligation may be in an amount equal to the sum of (i) 100 per

centum of $25,000 of the appraised value of the property as of the

date the mortgage is accepted for insurance, and (ii) 95 per centum

of such value in excess of $25,000. Notwithstanding any other

provision of this section, in any case where the dwelling is not

approved for mortgage insurance prior to the beginning of

construction, such mortgage shall not exceed 90 per centum of the

entire appraised value of the property as of the date the mortgage

is accepted for insurance, unless (i) the dwelling was completed

more than one year prior to the application for mortgage insurance,

or (ii) the dwelling was approved for guaranty, insurance, or a

direct loan under chapter 37 of title 38 prior to the beginning of

construction, or (iii) the dwelling is covered by a consumer

protection or warranty plan acceptable to the Secretary and

satisfies all requirements which would have been applicable if such

dwelling had been approved for mortgage insurance prior to the

beginning of construction. As used herein, the term ``veteran''

means any person who served on active duty in the armed forces of

the United States for a period of not less than ninety days (or is

certified by the Secretary of Defense as having performed extra-

hazardous service), and who was discharged or released therefrom

under conditions other than dishonorable, except that persons

enlisting in the armed forces after September 7, 1980, or entering

active duty after October 16, 1981, shall have their eligibility

determined in accordance with section 5303A(d) of title 38.

Notwithstanding any other provision of this paragraph, the amount

which may be insured under this section may be increased by up to 20

percent if such increase is necessary to account for the increased

cost of the residence due to the installation of a solar energy

system (as defined in subparagraph (3) of the last paragraph of

section 1703(a) of this title) therein.

Except with respect to mortgages executed by mortgagors who are

veterans, a mortgage may not involve a principal obligation

(including such initial service charges, appraisal, inspection, and

other fees as the Secretary shall approve) in excess of 98.75

percent of the appraised value of the property (97.75 percent, in

the case of a mortgage with an appraised value in excess of

$50,000), plus the amount of the mortgage insurance premium paid at

the time the mortgage is insured. For purposes of the preceding

sentence, the term ``appraised value'' means the amount set forth in

the written statement required under section 1715q of this title, or

a similar amount determined by the Secretary if section 1715q of

this title does not apply. Notwithstanding the authority of the

Secretary to establish the terms of insurance under this section and

approve the initial service charges, appraisal, inspection, and

other fees (and subject to any other limitations under this section

on the amount of a principal obligation), the Secretary may not (by

regulation or otherwise) limit the percentage or amount of any such

approved charges and fees that may be included in the principal

obligation of a mortgage.

Notwithstanding any other provision of this paragraph, the

Secretary may not insure, or enter into a commitment to insure, a

mortgage under this section that is executed by a first-time

homebuyer and that involves a principal obligation (including such

initial service charges, appraisal, inspection, and other fees as

the Secretary shall approve) in excess of 97 percent of the

appraised value of the property unless the mortgagor has completed a

program of counseling with respect to the responsibilities and

financial management involved in homeownership that is approved by

the Secretary; except that the Secretary may, in the discretion of

the Secretary, waive the applicability of this requirement.

In conjunction with any loan insured under this section, an

original lender shall provide to each prospective borrower a

disclosure notice that provides a one page analysis of mortgage

products offered by that lender and for which the borrower would

qualify. This notice shall include: (i) 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 this

subsection 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 1454(a)(2) of this title or section

1717(b)(2) of this title, as applicable), assuming prevailing

interest rates; and (ii) a statement regarding when the mortgagor's

requirement to pay the mortgage insurance premiums for a mortgage

insured under this section would terminate or a statement that the

requirement will terminate only if the mortgage is refinanced, paid

off, or otherwise terminated.

(3) Have a maturity satisfactory to the Secretary, but not to

exceed, in any event, thirty-five years (or thirty years if such

mortgage is not approved for insurance prior to construction) from

the date of the beginning of amortization of the mortgage.

(4) Contain complete amortization provisions satisfactory to the

Secretary requiring periodic payments by the mortgagor not in excess

of his reasonable ability to pay as determined by the Secretary.

(5) Bear interest at such rate as may be agreed upon by the

mortgagor and the mortgagee.

(6) Provide, in a manner satisfactory to the Secretary, for the

application of the mortgagor's periodic payments (exclusive of the

amount allocated to interest and to the premium charge which is

required for mortgage insurance as hereinafter provided) to

amortization of the principal of the mortgage.

(7) Contain such terms and provisions with respect to insurance,

repairs, alterations, payment of taxes, default, reserves,

delinquency charges, foreclosure proceedings, anticipation of

maturity, additional and secondary liens, and other matters as the

Secretary may in his discretion prescribe.

(8) Repealed. Pub. L. 100-242, title IV, Sec. 406(b)(2), Feb. 5,

1988, 101 Stat. 1900.

(9) Be executed by a mortgagor who shall have paid on account of

the property (except with respect to a mortgage executed by a

mortgagor who is a veteran) at least 3 per centum, or such larger

amount as the Secretary may determine, of the Secretary's estimate

of the cost of acquisition (excluding the mortgage insurance premium

paid at the time the mortgage is insured) in cash or its equivalent:

Provided, That with respect to a mortgage executed by a mortgagor

who is sixty years of age or older as of the date the mortgage is

endorsed for insurance or with respect to a mortgage meeting the

requirements of subsection (i) of this section, or with respect to a

mortgage covering a single-family home being purchased under the

low-income housing demonstration project assisted pursuant to

section 1436 \1\ of title 42, or with respect to a mortgage covering

a housing unit in connection with a homeownership program under the

Homeownership and Opportunity Through HOPE Act, the mortgagor's

payment required by this subsection may be paid by a corporation or

person other than the mortgagor under such terms and conditions as

the Secretary may prescribe: Provided further, That for purposes of

this paragraph, the Secretary shall consider as cash or its

equivalent any amounts borrowed from a family member (as such term

is defined in section 1707 of this title), subject only to the

requirements that, in any case in which the repayment of such

borrowed amounts is secured by a lien against the property, such

lien shall be subordinate to the mortgage and the sum of the

principal obligation of the mortgage and the obligation secured by

such lien may not exceed 100 percent of the appraised value of the

property plus any initial service charges, appraisal, inspection,

and other fees in connection with the mortgage.

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\1\ See References in Text note below.

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(10) Calculation of Downpayment.--

(A) In general.--Notwithstanding any other provision of this

subsection, with respect to a mortgage closed on or before

December 31, 2002, involving a principal obligation not in

excess of the sum of--

(i) the amount of the mortgage insurance premium paid at

the time the mortgage is insured; and

(ii)(I) in the case of 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) in the case of 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) in the case of 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), in the

case of 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.


(B) Average closing cost.--For purposes of this paragraph,

the term ``average closing cost'' means, with respect to a

State, the average, for mortgages executed for properties that

are located within the State, of the total amounts (as

determined by the Secretary) of initial service charges,

appraisal, inspection, and other fees (as the Secretary shall

approve) that are paid in connection with such mortgages.


(c) Premium charges


(1) The Secretary is authorized to fix premium charges for the

insurance of mortgages under the separate sections of this subchapter

but in the case of any mortgage such charge shall be not less than an

amount equivalent to one-fourth of 1 per centum per annum nor more than

an amount equivalent to 1 per centum per annum of the amount of the

principal obligation of the mortgage outstanding at any time, without

taking into account delinquent payments or prepayments: Provided, That

premium charges fixed for insurance (1) under section 1715z-10, 1715z-

12, 1715z-16, 1715z-17, or 1715z-18 of this title, or any other

financing mechanism providing alternative methods for repayment of a

mortgage that is determined by the Secretary to involve additional risk,

or (2) under subsections \2\ (n) or (k) of this section are not required

to be the same as the premium charges for mortgages insured under the

other provisions of this section, but in no case shall premium charges

under subsection (n) or (k) of this section exceed 1 per centum per

annum: Provided, That any reduced premium charge so fixed and computed

may, in the discretion of the Secretary, also be made applicable in such

manner as the Secretary shall prescribe to each insured mortgage

outstanding under the section or sections involved at the time the

reduced premium charge is fixed. Such premium charges shall be payable

by the mortgagee, either in cash, or in debentures issued by the

Secretary under this subchapter at par plus accrued interest, in such

manner as may be prescribed by the Secretary: Provided, That debentures

presented in payment of premium charges shall represent obligations of

the particular insurance fund or account to which such premium charges

are to be credited: Provided further, That the Secretary may require the

payment of one or more such premium charges at the time the mortgage is

insured, at such discount rate as he may prescribe not in excess of the

interest rate specified in the mortgage. If the Secretary finds upon the

presentation of a mortgage for insurance and the tender of the initial

premium charge or charges so required that the mortgage complies with

the provisions of this section, such mortgage may be accepted for

insurance by endorsement or otherwise as the Secretary may prescribe;

but no mortgage shall be accepted for insurance under this section

unless the Secretary finds that the project with respect to which the

mortgage is executed is economically sound. In the event that the

principal obligation of any mortgage accepted for insurance is paid in

full prior to the maturity date, the Secretary is further authorized in

his discretion to require the payment by the mortgagee of an adjusted

premium charge in such amount as the Secretary determines to be

equitable, but not in excess of the aggregate amount of the premium

charges that the mortgagee would otherwise have been required to pay if

the mortgage had continued to be insured under this section until such

maturity date; and in the event that the principal obligation is paid in

full as herein set forth the Secretary is authorized to refund to the

mortgagee for the account of the mortgagor all, or such portion as he

shall determine to be equitable, of the current unearned premium charges

theretofore paid: Provided, That with respect to mortgages (1) for which

the Secretary requires, at the time the mortgage is insured, the payment

of a single premium charge to cover the total premium obligation for the

insurance of the mortgage, and (2) on which the principal obligation is

paid before the number of years on which the premium with respect to a

particular mortgage was based, or the property is sold subject to the

mortgage or is sold and the mortgage is assumed prior to such time, the

Secretary shall provide for refunds, where appropriate, of a portion of

the premium paid and shall provide for appropriate allocation of the

premium cost among the mortgagors over the term of the mortgage, in

accordance with procedures established by the Secretary which take into

account sound financial and actuarial considerations.

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\2\ So in original. Probably should be ``subsection''.

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(2) Notwithstanding any other provision of this section, each

mortgage secured by a 1- to 4-family dwelling that is an obligation of

the Mutual Mortgage Insurance Fund or of the General Insurance Fund

pursuant to subsection (v) of this section and each mortgage that is

insured under subsection (k) of this section or section 1715y(c) of this

title,,\3\ shall be subject to the following requirements:

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\3\ So in original.

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(A) The Secretary shall establish and collect, at the time of

insurance, a single premium payment in an amount not exceeding 2.25

percent of the amount of the original insured principal obligation

of the mortgage. In the case of a mortgage for which the mortgagor

is a first-time homebuyer who completes a program of counseling with

respect to the responsibilities and financial management involved in

homeownership that is approved by the Secretary, the premium payment

under this subparagraph shall not exceed 2.0 percent of the amount

of the original insured principal obligation of the mortgage. Upon

payment in full of the principal obligation of a mortgage prior to

the maturity date of the mortgage, the Secretary shall refund all of

the unearned premium charges paid on the mortgage pursuant to this

subparagraph.

(B) In addition to the premium under subparagraph (A), the

Secretary shall establish and collect annual premium payments in an

amount not exceeding 0.50 percent of the remaining insured principal

balance (excluding the portion of the remaining balance attributable

to the premium collected under subparagraph (A) and without taking

into account delinquent payments or prepayments) for the following

periods:

(i) For any mortgage involving an original principal

obligation (excluding any premium collected under subparagraph

(A)) that is less than 90 percent of the appraised value of the

property (as of the date the mortgage is accepted for

insurance), for the first 11 years of the mortgage term.

(ii) For any mortgage involving an original principal

obligation (excluding any premium collected under subparagraph

(A)) that is greater than or equal to 90 percent of such value,

for the first 30 years of the mortgage term; except that

notwithstanding the matter preceding clause (i), for any

mortgage involving an original principal obligation (excluding

any premium collected under subparagraph (A)) that is greater

than 95 percent of such value, the annual premium collected

during the 30-year period under this clause shall be in an

amount not exceeding 0.55 percent of the remaining insured

principal balance (excluding the portion of the remaining

balance attributable to the premium collected under subparagraph

(A) and without taking into account delinquent payments or

prepayments).


(d) Increase in maximum amount of mortgage


Notwithstanding any provision of this subchapter governing maximum

mortgage amounts for insuring a mortgage secured by a one- to four-

family dwelling, the maximum amount of the mortgage determined under any

such provision may be increased by the amount of the mortgage insurance

premium paid at the time the mortgage is insured.


(e) Contract of insurance as evidence of eligibility


Any contract of insurance heretofore or hereafter executed by the

Secretary under this subchapter shall be conclusive evidence of the

eligibility of the loan or mortgage for insurance, and the validity of

any contract of insurance so executed shall be incontestable in the

hands of an approved financial institution or approved mortgagee from

the date of the execution of such contract, except for fraud or

misrepresentation on the part of such approved financial institution or

approved mortgagee.


(f) Repealed. Aug. 2, 1954, ch. 649, title I, Sec. 109, 68 Stat. 592


(g) Limitation on use of single family mortgage insurance by investors


(1) The Secretary may insure a mortgage under this subchapter that

is secured by a 1- to 4-family dwelling, or approve a substitute

mortgagor with respect to any such mortgage, only if the mortgagor is to

occupy the dwelling as his or her principal residence or as a secondary

residence, as determined by the Secretary. In making this determination

with respect to the occupancy of secondary residences, the Secretary may

not insure mortgages with respect to such residences unless the

Secretary determines that it is necessary to avoid undue hardship to the

mortgagor. In no event may a secondary residence under this subsection

include a vacation home, as determined by the Secretary.

(2) The occupancy requirement established in paragraph (1) shall not

apply to any mortgagor (or co-mortgagor, as appropriate) that is--

(A) a public entity, as provided in section 1715d or 1715z-12 of

this title, or any other State or local government or an agency

thereof;

(B) a private nonprofit or public entity, as provided in section

1715l(h) or 1715z(j) of this title, or other private nonprofit

organization that is exempt from taxation under section 501(c)(3) of

title 26 and intends to sell or lease the mortgaged property to low

or moderate-income persons, as determined by the Secretary;

(C) an Indian tribe, as provided in section 1715z-13 of this

title;

(D) a serviceperson who is unable to meet such requirement

because of his or her duty assignment, as provided in section 1715g

of this title or subsection (b)(4) or (f) of section 1715m of this

title;

(E) a mortgagor or co-mortgagor under subsection (k) of this

section; or

(F) a mortgagor that, pursuant to section 1715n(a)(7) of this

title, is refinancing an existing mortgage insured under this

chapter for not more than the outstanding balance of the existing

mortgage, if the amount of the monthly payment due under the

refinancing mortgage is less than the amount due under the existing

mortgage for the month in which the refinancing mortgage is

executed.


(3) For purposes of this subsection, the term ``substitute

mortgagor'' means a person who, upon the release by a mortgagee of a

previous mortgagor from personal liability on the mortgage note, assumes

such liability and agrees to pay the mortgage debt.


(h) Disaster housing


Notwithstanding any other provision of this section, the Secretary

is authorized to insure any mortgage which involves a principal

obligation not in excess of the applicable maximum dollar limit under

subsection (b) of this section and not in excess of 100 per centum of

the appraised value of a property upon which there is located a dwelling

designed principally for a single-family residence, where the mortgagor

establishes (to the satisfaction of the Secretary) that his home which

he occupied as an owner or as a tenant was destroyed or damaged to such

an extent that reconstruction is required as a result of a flood, fire,

hurricane, earthquake, storm, or other catastrophe which the President,

pursuant to sections 5122(2) and 5170 of title 42, has determined to be

a major disaster.


(i) Single-family housing in outlying areas


The Secretary is authorized to insure under this section any

mortgage meeting the requirements of subsection (b) of this section,

except as modified by this subsection, which involves a principal

obligation not in excess of 75 per centum of the limit on the principal

obligation applicable to a one-family residence under subsection (b) of

this section and not in excess of 97 per centum (or, in any case where

the dwelling is not approved for mortgage insurance prior to the

beginning of construction, unless the construction of the dwelling was

completed more than one year prior to the application for mortgage

insurance or the dwelling was approved for guaranty, insurance, or

direct loan under chapter 37 of title 38 prior to the beginning of

construction, 90 per centum) of the appraised value of a property

located in an area where the Secretary finds it is not practicable to

obtain conformity with many of the requirements essential to the

insurance of mortgages on housing in built-up urban areas, upon which

there is located a dwelling designed principally for a single-family

residence: Provided, That the Secretary finds that the property with

respect to which the mortgage is executed is an acceptable risk, giving

consideration to the need for providing adequate housing for families of

low and moderate income particularly in suburban and outlying areas or

small communities: Provided further, That under the foregoing provisions

of this subsection the Secretary is authorized to insure any mortgage

issued with respect to a farm home on a plot of land two and one-half or

more acres in size adjacent to an all-weather public road.


(j) Real estate loans by national banks


Loans secured by mortgages insured under this section shall not be

taken into account in determining the amount of real estate loans which

a national bank may make in relation to its capital and surplus or its

time and savings deposits.


(k) Rehabilitation of one- to four-family structures; definitions;

eligibility; refinancing and extension; General Insurance Fund


(1) The Secretary may, in order to assist in the rehabilitation of

one- to four-family structures used primarily for residential purposes,

insure and make commitments to insure rehabilitation loans (including

advances made during rehabilitation) made by financial institutions on

and after 180 days following October 31, 1978. Such commitments to

insure and such insurance shall be made upon such terms and conditions

which the Secretary may prescribe and which are consistent with the

provisions of subsections (b), (c), (e), (i), and (j) of this section,

except as modified by the provisions of this subsection.

(2) For the purpose of this subsection--

(A) the term ``rehabilitation loan'' means a loan, advance of

credit, or purchase of an obligation representing a loan or advance

of credit, made for the purpose of financing--

(i) the rehabilitation of an existing one- to four-unit

structure which will be used primarily for residential purposes;

(ii) the rehabilitation of such a structure and the

refinancing of the outstanding indebtedness on such structure

and the real property on which the structure is located; or

(iii) the rehabilitation of such a structure and the

purchase of the structure and the real property on which it is

located; and


(B) the term ``rehabilitation'' means the improvement (including

improvements designed to meet cost-effective energy conservation

standards prescribed by the Secretary) or repair of a structure, or

facilities in connection with a structure, and may include the

provision of such sanitary or other facilities as are required by

applicable codes, a community development plan, or a statewide

property insurance plan to be provided by the owner or tenant of the

project. The term ``rehabilitation'' may also include measures to

evaluate and reduce lead-based paint hazards, as such terms are

defined in section 4851b of title 42.


(3) To be eligible for insurance under this subsection, a

rehabilitation loan shall--

(A) involve a principal obligation (including such initial

service charges, appraisal, inspection, and other fees as the

Secretary shall approve) in an amount which does not exceed, when

added to any outstanding indebtedness of the borrower which is

secured by the structure and the property on which it is located,

the amount specified in subsection (b)(2) of this section; except

that, in determining the amount of the principal obligation for

purposes of this subsection, the Secretary shall establish as the

appraised value of the property an amount not to exceed the sum of

the estimated cost of rehabilitation and the Secretary's estimate of

the value of the property before rehabilitation;

(B) bear interest at such rate as may be agreed upon by the

borrower and the financial institution;

(C) be an acceptable risk, as determined by the Secretary; and

(D) comply with such other terms, conditions, and restrictions

as the Secretary may prescribe.


(4) Any rehabilitation loan insured under this subsection may be

refinanced and extended in accordance with such terms and conditions as

the Secretary may prescribe, but in no event for an additional amount or

term which exceeds the maximum provided for in this subsection.

(5) All funds received and all disbursements made pursuant to the

authority established by this subsection shall be credited or charged,

as appropriate, to the General Insurance Fund, and insurance benefits

shall be paid in cash out of such Fund or in debentures executed in the

name of such Fund. Insurance benefits paid with respect to loans secured

by a first mortgage and insured under this subsection shall be paid in

accordance with section 1710 of this title, except that all references

in section 1710 of this title to the Mutual Mortgage Insurance Fund

shall be construed as referring to the General Insurance Fund. Insurance

benefits paid with respect to loans secured by a mortgage other than a

first mortgage and insured under this subsection shall be paid in

accordance with paragraphs (6) and (7) of section 1715k(h) of this

title, except that reference to ``this subsection'' in such paragraphs

shall be construed as referring to this subsection.


(l) Repealed. Pub. L. 90-448, title I, Sec. 103(b), Aug. 1, 1968, 82

Stat. 486


(m) Repealed. Pub. L. 100-242, title IV, Sec. 406(c), Feb. 5, 1988, 101

Stat. 1902


(n) Cooperative housing projects; definitions


(1) The Secretary is authorized to insure under this section any

mortgage meeting the requirements of subsection (b) of this section,

except as modified by this subsection. To be eligible, the mortgage

shall involve a dwelling unit in a cooperative housing project which is

covered by a blanket mortgage insured under this chapter or the

construction of which was completed more than a year prior to the

application for the mortgage insurance. The mortgage amount as

determined under the other provisions of subsection (b) of this section

shall be reduced by an amount equal to the portion of the unpaid balance

of the blanket mortgage covering the project which is attributable (as

of the date the mortgage is accepted for insurance) to such unit.

(2) For the purposes of this subsection--

(A) The terms ``home mortgage'' and ``mortgage'' include a first

lien given (in accordance with the laws of the State where the

property is located and accompanied by such security and other

undertakings as may be required under regulations of the Secretary)

to secure a loan made to finance the purchase of stock or membership

in a cooperative ownership housing corporation the permanent

occupancy of the dwelling units of which is restricted to members of

such corporation, where the purchase of such stock or membership

will entitle the purchaser to the permanent occupancy of one of such

units.

(B) The terms ``appraised value of the property'', ``value of

the property'', and ``value'' include the appraised value of a

dwelling unit in a cooperative housing project of the type described

in subparagraph (A) where the purchase of the stock or membership

involved will entitle the purchaser to the permanent occupancy of

that unit; and the term ``property'' includes a dwelling unit in

such a cooperative project.

(C) The term ``mortgagor'' includes a person or persons giving a

first lien (of the type described in subparagraph (A)) to secure a

loan to finance the purchase of stock or membership in a cooperative

housing corporation.


(o) Insurance of mortgages on owner occupied homes in communities

subject to adverse economic conditions resulting from Indian

claims to ownership of land; obligation of Special Risk

Insurance Fund


(1) Notwithstanding any other provision of this section or any other

section of this subchapter, the Secretary is authorized to insure, and

to commit to insure, under subsection (b) of this section as modified by

this subsection a mortgage which meets both the requirements of this

subsection and such criteria as the Secretary by regulation may

prescribe to further the purpose of this subsection, in any community

where the Secretary determines that--

(A) temporary adverse economic conditions exist throughout the

community as a direct and primary result of outstanding claims to

ownership of land in the community by an American Indian tribe,

band, or Nation;

(B) such ownership claims are reasonably likely to be settled,

by court action or otherwise;

(C) as a direct result of the community's temporarily impaired

economic condition, owner occupants of homes in the community have

been involuntarily unemployed or underemployed and have thus

incurred substantial reductions in income which significantly impair

their ability to continue timely payment of their mortgages;

(D) as a result, widespread mortgage foreclosures and distress

sales of homes are likely in the community; and

(E) fifty or more individual homeowners were joined as parties

defendant or were members of a defendant class prior to December 31,

1976, in litigation involving claims to ownership of land in the

community by an American Indian tribe, band, or Nation.


(2) A mortgage shall be eligible for insurance under subsection (b)

of this section as modified by this subsection without regard to

limitations in this subchapter relating to a mortgagor's reasonable

ability to pay, economic soundness, marketability of title, or any other

statutory restriction which the Secretary determines is contrary to the

purpose of this subsection, but only if the mortgagor is an owner of a

home in a community specified in paragraph (1) who, as a direct result

of the community's temporarily impaired economic condition, has been

involuntarily unemployed or underemployed and has thus incurred a

substantial reduction in income which significantly impairs the owner's

ability to continue timely payment of the mortgage. The Secretary is

authorized to encourage or afford directly to or on behalf of mortgagors

whose mortgages are insured under subsection (b) of this section as

modified by this subsection forebearance, assignment of mortgages to the

Secretary, or such other relief as the Secretary deems appropriate and

consistent with the purpose of this subsection. The Secretary, in

connection with any mortgage insured under subsection (b) of this

section as modified by this subsection, shall have all statutory powers,

authority, and responsibilities which the Secretary has with respect to

other mortgages insured under subsection (b) of this section, except

that the Secretary may modify such powers, authority, or

responsibilities where the Secretary deems such action to be necessary

because of the special nature of the mortgage involved. Notwithstanding

section 1708 of this title, the insurance of a mortgage under subsection

(b) of this section as modified by this subsection shall be the

obligation of the Special Risk Insurance Fund created pursuant to

section 1715z-3 of this title.


(p) Insurance of mortgages in communities subject to temporary adverse

economic conditions as a result of claims to ownership of land

in the community by an American Indian Tribe, band, or nation;

eligibility, authorities, etc.


(1) Notwithstanding any other provision of this section or any other

section of this subchapter, the Secretary is authorized to insure, and

to commit to insure, under subsection (b) of this section as modified by

this subsection a mortgage which meets both the requirements of this

subsection and such criteria as the Secretary by regulation shall

prescribe to further the purpose of this subsection, in any community

where the Secretary determines that--

(A) temporary adverse economic conditions exist throughout the

community as a direct and primary result of outstanding claims to

ownership of land in the community by an American Indian tribe,

band, or nation;

(B) such ownership claims are reasonably likely to be settled,

by court action or otherwise; and

(C) fifty or more individual homeowners were joined as parties

defendant or were members of a defendant class prior to April 1,

1980, in litigation involving claims to ownership of land in the

community by an American Indian tribe, band, group, or nation

pursuant to a dispute involving the Articles of Confederation, Trade

and Intercourse Act of 1790, or any similar State or Federal law.


(2) A mortgage shall be eligible for insurance under subsection (b)

of this section as modified by this subsection without regard to

limitations in this subchapter relating to marketability of title, or

any other statutory restriction which the Secretary determines is

contrary to the purpose of this subsection, but only if the mortgagor is

an owner of a home in a community specified in paragraph (1). The

Secretary, in connection with any mortgage insured under subsection (b)

of this section as modified by this subsection, shall have all statutory

powers, authority, and responsibilities which the Secretary has with

respect to other mortgages insured under subsection (b) of this section,

except that the Secretary may modify such powers, authority, or

responsibilities where the Secretary deems such action to be necessary

because of the special nature of the mortgage involved. Notwithstanding

section 1708 of this title, the insurance of a mortgage under subsection

(b) of this section as modified by this subsection shall be the

obligation of the Special Risk Insurance Fund created pursuant to

section 1715z-3 of this title.


(q) Insurance of mortgages secured by property on certain lands leased

by Seneca Nation of New York Indians


(1) Notwithstanding any other provision of this section or any other

section of this subchapter, the Secretary shall insure and commit to

insure, under subsection (b) of this section as modified by this

subsection, any mortgage secured by property located on land that--

(A) is within the Allegany Reservation of the Seneca Nation of

New York Indians; and

(B) is subject to a lease entered into for a term of 99 years

pursuant to the Act of February 19, 1875 (Chapter 90; 18 Stat. 330)

and the Act of September 30, 1890 (Chapter 1132; 26 Stat. 558).


(2) A mortgage shall be eligible for insurance under subsection (b)

of this section as modified by this subsection without regard to

limitations in this subchapter relating to marketability of title or any

other statutory restriction that the Secretary determines is contrary to

the purpose of this subsection.

(3) The Secretary, in connection with any mortgage insured under

subsection (b) of this section as modified by this subsection, shall

have all statutory powers, authority, and responsibilities that the

Secretary has with respect to other mortgages insured under subsection

(b) of this section, except that the Secretary may modify such powers,

authority, or responsibilities if the Secretary determines such action

to be necessary because of the special nature of the mortgage involved.

(4) Notwithstanding section 1708 of this title, the insurance of a

mortgage under subsection (b) of this section as modified by this

subsection shall be the obligation of the Special Risk Insurance Fund

created in section 1715z-3 of this title.


(r) Actions to reduce losses under single family mortgage insurance

program


The Secretary shall take appropriate actions to reduce losses under

the single-family mortgage insurance programs carried out under this

subchapter. Such actions shall include--

(1) an annual review by the Secretary of the rate of early

serious defaults and claims, in accordance with section 1735f-11 of

this title;

(2) requiring that at least one person acquiring ownership of a

one- to four-family residential property encumbered by a mortgage

insured under this subchapter be determined to be creditworthy under

standards prescribed by the Secretary, whether or not such person

assumes personal liability under the mortgage (except that

acquisitions by devise or descent shall not be subject to this

requirement);

(3) in any case where personal liability under a mortgage is

assumed, requiring that the original mortgagor be advised of the

procedures by which he or she may be released from liability; and

(4) providing counseling, either directly or through third

parties, to delinquent mortgagors whose mortgages are insured under

this section, using the Fund to pay for such counseling.


In any case where the homeowner does not request a release from

liability, the purchaser and the homeowner shall have joint and several

liability for any default for a period of 5 years following the date of

the assumption. After the close of such 5-year period, only the

purchaser shall be liable for any default on the mortgage unless the

mortgage is in default at the time of the expiration of the 5-year

period.


(s) Suspension or revocation of approval of mortgagee; notice and

statement of reasons


Whenever the Secretary has taken any discretionary action to suspend

or revoke the approval of any mortgagee to participate in any mortgage

insurance program under this subchapter, the Secretary shall provide

prompt notice of the action and a statement of the reasons for the

action to--

(1) the Secretary of Veterans Affairs;

(2) the chief executive officer of the Federal National Mortgage

Association;

(3) the chief executive officer of the Federal Home Loan

Mortgage Corporation;

(4) the Administrator of the Farmers Home Administration;

(5) if the mortgagee is a national bank or District bank, or a

subsidiary or affiliate of such a bank, the Comptroller of the

Currency;

(6) if the mortgagee is a State bank that is a member of the

Federal Reserve System or a subsidiary or affiliate of such a bank,

or a bank holding company or a subsidiary or affiliate of such a

company, the Board of Governors of the Federal Reserve System;

(7) if the mortgagee is a State bank that is not a member of the

Federal Reserve System or is a subsidiary or affiliate of such a

bank, the Board of Directors of the Federal Deposit Insurance

Corporation; and

(8) if the mortgagee is a Federal or State savings association

or a subsidiary or affiliate of a savings association, the Director

of the Office of Thrift Supervision.


(t) Disclosure regarding interest due upon mortgage prepayment


(1) Each mortgagee (or servicer) with respect to a mortgage under

this section shall provide each mortgagor of such mortgagee (or

servicer) written notice, not less than annually, containing a statement

of the amount outstanding for prepayment of the principal amount of the

mortgage and describing any requirements the mortgagor must fulfill to

prevent the accrual of any interest on such principal amount after the

date of any prepayment. This paragraph shall apply to any insured

mortgage outstanding on or after the expiration of the 90-day period

beginning on the date of effectiveness of final regulations implementing

this paragraph.

(2) Each mortgagee (or servicer) with respect to a mortgage under

this section shall, at or before closing with respect to any such

mortgage, provide the mortgagor with written notice (in such form as the

Secretary shall prescribe, by regulation, before the expiration of the

90-day period beginning upon November 28, 1990) describing any

requirements the mortgagor must fulfill upon prepayment of the principal

amount of the mortgage to prevent the accrual of any interest on the

principal amount after the date of such prepayment. This paragraph shall

apply to any mortgage executed after the expiration of the period under

paragraph (1).


(u) Accountability of mortgage lenders


(1) No mortgagee may make or hold mortgages insured under this

section if the customary lending practices of the mortgagee, as

determined by the Secretary pursuant to section 1735f-17 of this title,

provide for a variation in mortgage charge rates that exceeds 2 percent

for insured mortgages made by the mortgagee on dwellings located within

an area. The Secretary shall ensure that any permissible variations in

the mortgage charge rates of any mortgagee are based only on actual

variations in fees or costs to the mortgagee to make the loan.

(2) For purposes of this subsection--

(A) the term ``area'' shall have the meaning given the term

under subsection (b)(2) of this section;

(B) the term ``mortgage charges'' includes the interest rate,

discount points, loan origination fee, and any other amount charged

to a mortgagor with respect to an insured mortgage; and

(C) the term ``mortgage charge rate'' means the amount of

mortgage charges for an insured mortgage expressed as a percentage

of the initial principal amount of the mortgage.


(v) Use of FHA insurance with assistance under 42 U.S.C. 1437f


Notwithstanding section 1708 of this title, the insurance of a

mortgage under this section in connection with the assistance provided

under section 1437f(y) of title 42 shall be the obligation of the

General Insurance Fund created pursuant to section 1735c \4\ of this

title. The provisions of subsections (a) through (h),\4\ (j), and (k)

\4\ of section 1710 of this title shall apply to such mortgages, except

that (1) all references in section 1710 of this title to the Mutual

Mortgage Insurance Fund or the Fund shall be construed to refer to the

General Insurance Fund, and (2) any excess amounts described in section

1710(f)(1) of this title shall be retained by the Secretary and credited

to the General Insurance Fund.

---------------------------------------------------------------------------

\4\ See References in Text note below.

---------------------------------------------------------------------------


(w) Annual report


The Secretary of Housing and Urban Development shall submit to the

Congress an annual report on the single family mortgage insurance

program under this section. Each report shall set forth--

(1) an analysis of the income groups served by the single family

insurance program, including--

(A) the percentage of borrowers whose incomes do not exceed

100 percent of the median income for the area;

(B) the percentage of borrowers whose incomes do not exceed

80 percent of the median income for the area; and

(C) the percentage of borrowers whose incomes do not exceed

60 percent of the median income for the area;


(2) an analysis of the percentage of minority borrowers annually

assisted by the program; the percentage of central city borrowers

assisted and the percentage of rural borrowers assisted by the

program;

(3) the extent to which the Secretary in carrying out the

program has employed methods to ensure that needs of low and

moderate income families, underserved areas, and historically

disadvantaged groups are served by the program; and

(4) the current impediments to having the program serve low and

moderate income borrowers; borrowers from central city areas;

borrowers from rural areas; and minority borrowers.


The report required under this subsection shall include the report

required under section 1735f-18(c) of this title and the report required

under section 1711(g) of this title.


(x) Management deficiencies report


(1) In general


Not later than 60 days after October 21, 1998, and annually

thereafter, the Secretary shall submit to Congress a report on the

plan of the Secretary to address each material weakness, reportable

condition, and noncompliance with an applicable law or regulation

(as defined by the Director of the Office of Management and Budget)

identified in the most recent audited financial statement of the

Federal Housing Administration submitted under section 3515 of title

31.


(2) Contents of annual report


Each report submitted under paragraph (1) shall include--

(A) an estimate of the resources, including staff,

information systems, and contract assistance, required to

address each material weakness, reportable condition, and

noncompliance with an applicable law or regulation described in

paragraph (1), and the costs associated with those resources;

(B) an estimated timetable for addressing each material

weakness, reportable condition, and noncompliance with an

applicable law or regulation described in paragraph (1); and

(C) the progress of the Secretary in implementing the plan

of the Secretary included in the report submitted under

paragraph (1) for the preceding year, except that this

subparagraph does not apply to the initial report submitted

under paragraph (1).


(June 27, 1934, ch. 847, title II, Sec. 203, 48 Stat. 1248; May 28,

1935, ch. 150, Sec. 29(a), 49 Stat. 299; Aug. 23, 1935, ch. 614, title

III, Sec. 344(c), 49 Stat. 722; Feb. 3, 1938, ch. 13, Sec. 3, 52 Stat.

10; June 3, 1939, ch. 175, Secs. 6-8, 53 Stat. 805, 806; June 28, 1941,

ch. 261, Sec. 8, 55 Stat. 365; Oct. 15, 1943, ch. 259, Sec. 2, 57 Stat.

571; July 1, 1946, ch. 531, 60 Stat. 408; Aug. 10, 1948, ch. 832, title

I, Sec. 101(g)-(k), 62 Stat. 1272; July 15, 1949, ch. 338, title II,

Sec. 201(2), 63 Stat. 421; Aug. 30, 1949, ch. 524, 63 Stat. 681; Oct.

25, 1949, ch. 729, Sec. 1(2), 63 Stat. 905; Apr. 20, 1950, ch. 94, title

I, Secs. 103, 104(a), 122, 64 Stat. 51, 59; June 30, 1953, ch. 170,

Sec. 3, 67 Stat. 121; Aug. 2, 1954, ch. 649, title I, Secs. 104-110, 68

Stat. 591, 592; Aug. 7, 1956, ch. 1029, title I, Secs. 102, 104(a), 70

Stat. 1091, 1092; Pub. L. 85-104, title I, Secs. 101, 106, July 12,

1957, 71 Stat. 294, 297; Pub. L. 85-364, Sec. 1(a), Apr. 1, 1958, 72

Stat. 73; Pub. L. 86-372, title I, Secs. 102, 103, title VIII, Sec. 809,

Sept. 23, 1959, 73 Stat. 654, 688; Pub. L. 87-70, title I, Sec. 102(b),

title VI, Secs. 604(b), 605, 606, 612(a), June 30, 1961, 75 Stat. 157,

177, 178, 180; Pub. L. 88-560, title I, Secs. 102, 103, 105(c)(1), Sept.

2, 1964, 78 Stat. 769, 772; Pub. L. 89-117, title II, Secs. 203-206,

title XI, Sec. 1108(c), Aug. 10, 1965, 79 Stat. 466, 504; Pub. L. 89-

754, title III, Secs. 301, 302, Nov. 3, 1966, 80 Stat. 1266; Pub. L. 90-

19, Sec. 1(a)(3), (4), May 25, 1967, 81 Stat. 17; Pub. L. 90-448, title

I, Sec. 103(b), title III, Secs. 317, 318, title XI, Sec. 1106(d), Aug.

1, 1968, 82 Stat. 486, 512, 567; Pub. L. 91-152, title I, Secs. 102(a),

113(a), Dec. 24, 1969, 83 Stat. 379, 383; Pub. L. 91-606, title III,

Sec. 301(c), Dec. 31, 1970, 84 Stat. 1758; Pub. L. 93-288, title VII,

Sec. 702(c), formerly title VI, Sec. 602(c), May 22, 1974, 88 Stat. 163,

renumbered title VII, Sec. 702(c), Pub. L. 103-337, div. C, title XXXIV,

Sec. 3411(a)(1), (2), Oct. 5, 1994, 108 Stat. 3100; Pub. L. 93-383,

title III, Secs. 302(a), 310(a), Aug. 22, 1974, 88 Stat. 676, 682; Pub.

L. 93-449, Sec. 4(b), Oct. 18, 1974, 88 Stat. 1367; Pub. L. 95-128,

title III, Secs. 303(a), (g), 304(a), 305, 307, Oct. 12, 1977, 91 Stat.

1132, 1133, 1134; Pub. L. 95-557, title I, Sec. 101(c)(1), (2), Oct. 31,

1978, 92 Stat. 2082, 2083; Pub. L. 95-619, title II, Sec. 248(a), Nov.

9, 1978, 92 Stat. 3235; Pub. L. 96-153, title III, Secs. 310, 312(a),

318, Dec. 21, 1979, 93 Stat. 1114, 1116, 1119; Pub. L. 96-399, title

III, Secs. 321, 328, 333(a), 336(a), Oct. 8, 1980, 94 Stat. 1646, 1651,

1653, 1654; Pub. L. 97-253, title II, Sec. 201(a), (b), Sept. 8, 1982,

96 Stat. 789; Pub. L. 98-63, title I, Sec. 101, July 30, 1983, 97 Stat.

321; Pub. L. 98-181, title IV, Secs. 404(b)(2), (3), 419, 423(a),

(b)(1), 424(a), 425, 447, Nov. 30, 1983, 97 Stat. 1209, 1212, 1216-1218,

1228; Pub. L. 98-479, title II, Sec. 204(a)(2), Oct. 17, 1984, 98 Stat.

2232; Pub. L. 99-601, Nov. 5, 1986, 100 Stat. 3357; Pub. L. 100-242,

title IV, Secs. 403-405(1), 406(a)-(b)(6), (c), 407(a)(1), 422(b), 423,

429(c), Feb. 5, 1988, 101 Stat. 1899-1902, 1914, 1918; Pub. L. 100-628,

title X, Secs. 1061-1063(a), Nov. 7, 1988, 102 Stat. 3274; Pub. L. 100-

707, title I, Sec. 109(e)(2), Nov. 23, 1988, 102 Stat. 4708; Pub. L.

101-144, title II, Nov. 9, 1989, 103 Stat. 852; Pub. L. 101-235, title

I, Secs. 132(a), 135, 143(a), (b), Dec. 15, 1989, 103 Stat. 2026, 2028,

2036; Pub. L. 101-402, Sec. 3, Oct. 1, 1990, 104 Stat. 866; Pub. L. 101-

507, title II, Nov. 5, 1990, 104 Stat. 1369; Pub. L. 101-508, title II,

Secs. 2101-2103(a), Nov. 5, 1990, 104 Stat. 1388-17; Pub. L. 101-625,

title III, Secs. 326(a), 327, 329, 330(a), title IV, Sec. 429, Nov. 28,

1990, 104 Stat. 4137, 4138, 4171; Pub. L. 102-40, title IV,

Sec. 402(d)(2), May 7, 1991, 105 Stat. 239; Pub. L. 102-389, title II,

Oct. 6, 1992, 106 Stat. 1591, 1593; Pub. L. 102-550, title I,

Sec. 185(c)(1), title V, Secs. 503(a), 504-506(a), 507(a), title X,

Sec. 1012(k)(2), Oct. 28, 1992, 106 Stat. 3747, 3779-3782, 3907; Pub. L.

103-211, title I, Feb. 12, 1994, 108 Stat. 12; Pub. L. 103-327, title

II, Sept. 28, 1994, 108 Stat. 2314; Pub. L. 104-204, title IV,

Secs. 424, 425(a), 426, Sept. 26, 1996, 110 Stat. 2927, 2928; Pub. L.

105-65, title II, Sec. 211, Oct. 27, 1997, 111 Stat. 1366; Pub. L. 105-

276, title II, Secs. 212, 224, 225(a), 228, Oct. 21, 1998, 112 Stat.

2486, 2489-2491; Pub. L. 106-74, title II, Sec. 207, Oct. 20, 1999, 113

Stat. 1072; Pub. L. 106-281, Sec. 2, Oct. 6, 2000, 114 Stat. 865; Pub.

L. 106-377, Sec. 1(a)(1) [title II, Secs. 209(a), 225], Oct. 27, 2000,

114 Stat. 1441, 1441A-25, 1441A-30; Pub. L. 106-569, title XI,

Sec. 1103(f), Dec. 27, 2000, 114 Stat. 3031; Pub. L. 107-73, title II,

Sec. 207(a), Nov. 26, 2001, 115 Stat. 674.)


References in Text


Section 1436 of title 42, referred to in subsec. (b)(9), was

repealed by Pub. L. 91-609, title V, Sec. 503(4), Dec. 31, 1970, 84

Stat. 1786. See section 1701z-1 et seq. of this title.

The Homeownership and Opportunity Through HOPE Act, referred to in

subsec. (b)(9), is title IV of Pub. L. 101-625, Nov. 28, 1990, 104 Stat.

4148, which enacted subchapter II-A (Sec. 1437aaa et seq.) of chapter 8

of Title 42, The Public Health and Welfare, and parts A (Sec. 12871 et

seq.) and B (Sec. 12891 et seq.) of subchapter IV of chapter 130 of

Title 42, amended sections 1437c, 1437f, 1437l, 1437p, 1437r, and 1437s

of Title 42, and enacted provisions set out as notes under sections

1437c, 1437aa, and 1437aaa of Title 42. For complete classification of

this Act to the Code, see Short Title note set out under section 1437aaa

of Title 42 and Tables.

Acts of February 19, 1875 (Chapter 90; 18 Stat. 330), and September

30, 1890 (Chapter 1132; 26 Stat. 558), referred to in subsec. (q)(1)(B),

which related to leasing of lands by the Seneca Nation of New York

Indians, are not classified to the Code.

Section 1735c of this title, referred to in subsec. (v), was in the

original ``section 519 of this title'', and was translated as meaning

section 519 of title V of the National Housing Act, act June 27, 1934,

ch. 847, to reflect the probable intent of Congress.

Subsection (h) of section 1710 of this title, referred to in subsec.

(v), was redesignated subsec. (i) by Pub. L. 105-276, title VI,

Sec. 602(1), Oct. 21, 1998, 112 Stat. 2674.

Subsection (k) of section 1710 of this title, referred to in subsec.

(v), was repealed by Pub. L. 105-276, title VI, Sec. 601(c), Oct. 21,

1998, 112 Stat. 2673.



Amendments


2001--Subsec. (c)(1). Pub. L. 107-73, Sec. 207(a)(1), substituted

``subsections (n) or (k) of this section'' for ``subsections (n) and (k)

of this section'' in cl. (2) of first proviso.

Subsec. (c)(2). Pub. L. 107-73, Sec. 207(a)(2), in introductory

provisions, struck out ``and executed on or after October 1, 1994,''

after ``1- to 4-family dwelling'' and inserted ``and each mortgage that

is insured under subsection (k) of this section or section 1715y(c) of

this title,'' after ``subsection (v) of this section''.

2000--Subsec. (b)(10)(A). Pub. L. 106-377, Sec. 1(a)(1) [title II,

Sec. 225], substituted ``mortgage closed on or before December 31, 2002,

involving'' for ``mortgage closed on or before October 30, 2000

involving'' in introductory provisions.

Pub. L. 106-281 substituted ``closed on or before October 30, 2000''

for ``executed for insurance in fiscal years 1998, 1999, and 2000'' in

introductory provisions.

Subsec. (s). Pub. L. 106-377, Sec. 1(a)(1) [title II,

Sec. 209(a)(2)], redesignated subsec. (s), relating to disclosure

regarding interest due upon mortgage prepayment, as (t).

Subsec. (t). Pub. L. 106-377, Sec. 1(a)(1) [title II,

Sec. 209(a)(2)], redesignated subsec. (s), relating to disclosure

regarding interest due upon mortgage prepayment, as (t).

Pub. L. 106-377, Sec. 1(a)(1) [title II, Sec. 209(a)(1)],

redesignated subsec. (t) as (u).

Subsec. (u). Pub. L. 106-377, Sec. 1(a)(1) [title II,

Sec. 209(a)(1)], redesignated subsec. (t) as (u).

Subsec. (v). Pub. L. 106-377, Sec. 1(a)(1) [title II,

Sec. 209(a)(3)], redesignated subsec. (v), relating to annual report, as

(w).

Subsec. (w). Pub. L. 106-569, which directed the amendment of

subsec. (v) relating to annual report by inserting concluding

provisions, was executed by making the insertion in subsec. (w) to

reflect the probable intent of Congress and the intervening

redesignation of that subsec. (v) as (w) by Pub. L. 106-377,

Sec. 1(a)(1) [title II, Sec. 209(a)(3)]. See below.

Pub. L. 106-377, Sec. 1(a)(1) [title II, Sec. 209(a)(3)],

redesignated subsec. (v), relating to annual report, as (w).

1999--Subsec. (b)(2)(A)(ii). Pub. L. 106-74 inserted ``the greater

of the dollar amount limitation in effect under this section for the

area on October 21, 1998, or'' before ``48 percent''.

1998--Subsec. (b)(2). Pub. L. 105-276, Sec. 225(a), inserted at end

undesignated par. relating to disclosure notice furnished by original

lender.

Subsec. (b)(2)(A). Pub. L. 105-276, Sec. 228(a), added cl. (ii) and

struck out former cl. (ii) and concluding provisions which read as

follows:

``(ii) 75 percent of the dollar amount limitation determined

under section 1454(a)(2) of this title for a residence of the

applicable size;

except that the applicable dollar amount limitation in effect for any

area under this subparagraph may not be less than the greater of the

dollar amount limitation in effect under this section for the area on

September 28, 1994, or 38 percent of the dollar amount limitation

determined under section 1454(a)(2) of this title for a residence of the

applicable size; and''.

Subsec. (b)(2)(B). Pub. L. 105-276, Sec. 228(b), amended first

sentence of concluding provisions generally. Prior to amendment,

sentence read as follows: ``For purposes of the preceding sentence, the

term `area' means a county, or a metropolitan statistical area as

established by the Office of Management and Budget, whichever results in

the higher dollar amount.''

Subsec. (b)(10). Pub. L. 105-276, Sec. 212(1), substituted

``Calculation of Downpayment'' for ``Alaska and hawaii'' in heading.

Subsec. (b)(10)(A). Pub. L. 105-276, Sec. 212(2), substituted

``executed for insurance in fiscal years 1998, 1999, and 2000'' for

``originated in the State of Alaska or the State of Hawaii and endorsed

for insurance in fiscal years 1997 and 1998,''.

Subsec. (x). Pub. L. 105-276, Sec. 224, added subsec. (x).

1997--Subsec. (b)(10)(A). Pub. L. 105-65 substituted ``fiscal years

1997 and 1998'' for ``fiscal year 1997''.

1996--Subsec. (b)(9). Pub. L. 104-204, Sec. 425(a), inserted before

period at end ``: Provided further, That for purposes of this paragraph,

the Secretary shall consider as cash or its equivalent any amounts

borrowed from a family member (as such term is defined in section 1707

of this title), subject only to the requirements that, in any case in

which the repayment of such borrowed amounts is secured by a lien

against the property, such lien shall be subordinate to the mortgage and

the sum of the principal obligation of the mortgage and the obligation

secured by such lien may not exceed 100 percent of the appraised value

of the property plus any initial service charges, appraisal, inspection,

and other fees in connection with the mortgage''.

Subsec. (b)(10). Pub. L. 104-204, Sec. 426, added par. (10).

Subsec. (c)(2)(A). Pub. L. 104-204, Sec. 424, inserted after first

sentence ``In the case of a mortgage for which the mortgagor is a first-

time homebuyer who completes a program of counseling with respect to the

responsibilities and financial management involved in homeownership that

is approved by the Secretary, the premium payment under this

subparagraph shall not exceed 2.0 percent of the amount of the original

insured principal obligation of the mortgage.''

1994--Subsec. (b)(2)(A). Pub. L. 103-327 substituted cl. (ii) and

concluding provisions for former cl. (ii) and concluding provisions

which read as follows:

``(ii) 75 percent of the dollar amount limitation determined

under section 1454(a)(2) of this title (as in effect on September

30, 1992) for a residence of the applicable size;

except that the applicable dollar amount limitation in effect for any

area under this subparagraph (A) may not be less than the dollar amount

limitation in effect under this section for the area on May 12, 1992;''.

Subsec. (h). Pub. L. 103-211, effective for 18-month period

following Feb. 12, 1994, for eligible persons, substituted ``Robert T.

Stafford Disaster Relief and Emergency Assistance Act'' for ``section

5122(2) and 5170 of title 42'' and inserted at end ``In any case in

which the single family residence to be insured under this subsection is

within a jurisdiction in which the President has declared a major

disaster to have occurred, the Secretary is authorized, for a temporary

period not to exceed 18 months from the date of such Presidential

declaration, to enter into agreements to insure a mortgage which

involves a principal obligation of up to 100 percent of the dollar

limitation determined under section 1454(a)(2) of this title for single

family residence, and not in excess of 100 percent of the appraised

value.'' See Applicability of 1994 Amendment note below.

Subsec. (k)(6). Pub. L. 103-211, effective for 18-month period

following Feb. 12, 1994, for eligible persons, added par. (6) which read

as follows: ``The Secretary is authorized, for a temporary period not to

exceed 18 months from the date on which the President has declared a

major disaster to have occurred, to enter into agreements to insure a

rehabilitation loan under this subsection which involves a principal

obligation of up to 100 percent of the dollar limitation determined

under section 1454(a)(2) of this title for a residence of the applicable

size, if such loan is secured by a structure and property that are

within a jurisdiction in which the President has declared such disaster,

pursuant to the Robert T. Stafford Disaster Relief and Emergency

Assistance Act [42 U.S.C. 5121 et seq.], and if such loan otherwise

conforms to the loan-to-value ratio and other requirements of this

subsection.'' See Applicability of 1994 Amendment note below.

1992--Subsec. (b)(2). Pub. L. 102-550, Sec. 506(a), added

undesignated par. prohibiting Secretary from insuring mortgage executed

by first-time homebuyer involving principal obligation in excess of 97

percent of value of property, unless mortgagor completes approved

counseling program or Secretary waives requirement.

Pub. L. 102-550, Sec. 505(a), substituted ``Except with respect to

mortgages executed by mortgagors who are veterans'' for

``Notwithstanding any other provision of this paragraph'' in second

undesignated par.

Pub. L. 102-550, Sec. 503(a), amended first sentence generally.

Prior to amendment, first sentence read as follows: ``Involve a

principal obligation (including such initial service charges, appraisal,

inspection, and other fees as the Secretary shall approve) in an

amount--

``(A) not to exceed the lesser of--

``(i) in the case of the 1-family residence, 95 percent of

the median 1-family house price in the area (as determined by

the Secretary); in the case of a 2-family residence, 107 percent

of such median price; in the case of a 3-family residence, 130

percent of such median price; or in the case of a 4-family

residence, 150 percent of such median price; or

``(ii) 75 percent of the dollar amount limitation determined

under section 1454(a)(2) of this title (as adjusted annually

under such section) for a residence of the applicable size;

except that the applicable dollar amount limitation in effect for

any area under this subparagraph (A) may not be less than the dollar

amount limitation in effect under this section for the area on May

12, 1992; and

``(B) except as otherwise provided in this paragraph (2), not to

exceed an amount equal to the sum of--

``(i) 97 percent of $25,000 of the appraised value of the

property, as of the date the mortgage is accepted for insurance;

``(ii) 95 percent of such value in excess of $25,000 but not

in excess of $125,000; and

``(iii) 90 percent of such value in excess of $125,000.''

Pub. L. 102-389 amended first sentence generally. Prior to

amendment, first sentence read as follows: ``Involve a principal

obligation (including such initial service charges, appraisal,

inspection, and other fees as the Secretary shall approve) in an amount

not to exceed $67,500 in the case of property upon which there is

located a dwelling designed principally for a one-family residence; or

$76,000 in the case of a two-family residence; or $92,000 in the case of

a three-family residence, or $107,000 in the case of a four-family

residence; except that the Secretary may increase the preceding maximum

dollar amounts on an area-by-area basis to the extent the Secretary

deems necessary, after taking into consideration the extent to which

moderate and middle income persons have limited housing opportunities in

the area due to high prevailing housing sales prices, but in no case may

such limits, as so increased, exceed the lesser of (A) 185 percent of

the dollar amount specified, or (B) in the case of a one-family

residence, 95 per centum of the median one-family house price in the

area, as determined by the Secretary; in the case of a two-family

residence, 107 per centum of such median price; in the case of a three-

family residence, 130 per centum of such median price; or in the case of

a four-family residence, 150 per centum of such median price; and

(except as otherwise provided in this paragraph) not to exceed an amount

equal to the sum of (i) 97 per centum of $25,000 of the appraised value

of the property, as of the date the mortgage is accepted for insurance,

and (ii) 95 per centum of such value in excess of $25,000.''

Pub. L. 102-389 inserted at end of second undesignated par.

``Notwithstanding the authority of the Secretary to establish the terms

of insurance under this section and approve the initial service charges,

appraisal, inspection, and other fees (and subject to any other

limitations under this section on the amount of a principal obligation),

the Secretary may not (by regulation or otherwise) limit the percentage

or amount of any such approved charges and fees that may be included in

the principal obligation of a mortgage.''

Subsec. (b)(9). Pub. L. 102-550, Sec. 505(b), substituted ``(except

with respect to a mortgage executed by a mortgagor who is a veteran)''

for ``(except in a case to which the next to the last sentence of

paragraph (2) applies)''.

Subsec. (c)(2). Pub. L. 102-550, Sec. 185(c)(1)(A), inserted ``or of

the General Insurance Fund pursuant to subsection (v) of this section''

after ``Fund'' in introductory provisions.

Subsec. (c)(2)(A), (B). Pub. L. 102-550, Sec. 507(a)(1), (2)(A),

substituted ``not exceeding'' for ``equal to''.

Subsec. (c)(2)(B)(ii). Pub. L. 102-550, Sec. 507(a)(2)(B),

substituted ``not exceeding 0.55 percent'' for ``equal to 0.55

percent''.

Subsec. (k)(2)(B). Pub. L. 102-550, Sec. 1012(k)(2), inserted at end

``The term `rehabilitation' may also include measures to evaluate and

reduce lead-based paint hazards, as such terms are defined in section

4851b of title 42.''

Subsec. (v). Pub. L. 102-550, Sec. 504, added subsec. (v) relating

to annual reports.

Pub. L. 102-550, Sec. 185(c)(1)(B), added subsec. (v) relating to

use of FHA insurance with assistance under 42 U.S.C. 1437f.

1991--Subsec. (b)(2). Pub. L. 102-40 substituted ``section 5303A(d)

of title 38'' for ``section 3103A(d) of title 38''.

1990--Subsec. (b)(2). Pub. L. 101-508, Sec. 2102, inserted at end

``Notwithstanding any other provision of this paragraph, a mortgage may

not involve a principal obligation (including such initial service

charges, appraisal, inspection, and other fees as the Secretary shall

approve) in excess of 98.75 percent of the appraised value of the

property (97.75 percent, in the case of a mortgage with an appraised

value in excess of $50,000), plus the amount of the mortgage insurance

premium paid at the time the mortgage is insured. For purposes of the

preceding sentence, the term `appraised value' means the amount set

forth in the written statement required under section 1715q of this

title, or a similar amount determined by the Secretary if section 1715q

of this title does not apply.''

Pub. L. 101-508, Sec. 2101, substituted ``185 percent of the dollar

amount specified'' for ``150 percent (185 percent until October 31,

1990) of the dollar amount specified'' after ``exceed the lesser of

(A)''.

Pub. L. 101-507 which directed the substitution of ``(185 percent

during fiscal year 1991)'' for ``(185 percent during fiscal year 1990)''

could not be executed because ``during fiscal year 1990'' did not appear

in text after amendment by Pub. L. 101-402. See below.

Pub. L. 101-402 substituted ``until October 31, 1990'' for ``during

fiscal year 1990''.

Subsec. (b)(9). Pub. L. 101-625, Sec. 429, inserted ``or with

respect to a mortgage covering a housing unit in connection with a

homeownership program under the Homeownership and Opportunity Through

HOPE Act,'' before ``the mortgagor's payment''.

Subsec. (c). Pub. L. 101-508, Sec. 2103(a), designated existing

provisions as par. (1), added par. (2), and struck out at end of par.

(1) ``In the case of any mortgage secured by a 1- to 4-family dwelling,

the total premium charge shall not exceed an amount equal to 3.8 percent

of the original principal obligation of the mortgage if the Secretary

requires (1) a single premium charge to cover the total premium

obligation of the insurance of the mortgage; or (2) a periodic premium

charge over less than the term of the mortgage.''

Subsec. (g)(1). Pub. L. 101-625, Sec. 326(a), inserted at end ``In

making this determination with respect to the occupancy of secondary

residences, the Secretary may not insure mortgages with respect to such

residences unless the Secretary determines that it is necessary to avoid

undue hardship to the mortgagor. In no event may a secondary residence

under this subsection include a vacation home, as determined by the

Secretary.''

Subsec. (r)(4). Pub. L. 101-625, Sec. 327, added par. (4).

Subsec. (s). Pub. L. 101-625, Sec. 329, added subsec. (s) relating

to disclosure regarding interest due upon mortgage prepayment.

Subsec. (t). Pub. L. 101-625, Sec. 330, added subsec. (t).

1989--Subsec. (b)(2). Pub. L. 101-144 inserted ``(185 percent during

fiscal year 1990)'' after ``(A) 150 percent''.

Subsec. (g)(2). Pub. L. 101-235, Sec. 143(b), redesignated par. (3)

as (2) and struck out former par. (2) which read as follows: ``The

occupancy requirement established in paragraph (1) shall apply only if

the mortgage involves a principal obligation that exceeds, as

appropriate, 75 percent of--

``(A) the appraised value of the dwelling;

``(B) the estimate of the Secretary of the replacement cost of

the property;

``(C) the sum of the estimates of the Secretary of the cost of

repair and rehabilitation and the value of the property before

repair and rehabilitation; or

``(D) the sum of the estimates of the Secretary of the cost of

repair and rehabilitation and the amount (as determined by the

Secretary) required to refinance existing indebtedness secured by

the property, and, in the case of a property refinanced under

section 1715k(d)(3)(A) of this title, any existing indebtedness

incurred in connection with improving, repairing, or rehabilitating

the property.''

Subsec. (g)(2)(A). Pub. L. 101-235, Sec. 143(a)(1), inserted ``, or

any other State or local government or an agency thereof'' before

semicolon at end.

Subsec. (g)(2)(B). Pub. L. 101-235, Sec. 143(a)(2), inserted ``, or

other private nonprofit organization that is exempt from taxation under

section 501(c)(3) of title 26 and intends to sell or lease the mortgaged

property to low or moderate-income persons, as determined by the

Secretary'' before semicolon at end.

Subsec. (g)(3), (4). Pub. L. 101-235, Sec. 143(b)(2), redesignated

par. (4) as (3). Former par. (3) redesignated (2).

Subsec. (r). Pub. L. 101-235, Sec. 132(a)(1), amended first sentence

generally, substituting ``the single-family mortgage insurance programs

carried out under this subchapter'' for ``the mortgage insurance program

carried out under this section''.

Subsec. (r)(2), (3). Pub. L. 101-235, Sec. 132(a)(2), amended pars.

(2) and (3) generally. Prior to amendment, pars. (2) and (3) read as

follows:

``(2) requiring reviews of the credit standing of each person

seeking to assume a mortgage insured under this section (A) during the

12-month period following the date on which the mortgage is executed, or

(B) during the 24-month period following the date on which the mortgage

is executed in the case of an investor originated mortgage; and

``(3) in any case where a mortgage is assumed after the period

specified in paragraph (2), requiring that the original mortgagor be

advised of the procedures by which he or she may be released from

liability.''

Subsec. (s). Pub. L. 101-235, Sec. 135, added subsec. (s).

1988--Subsec. (b)(2). Pub. L. 100-628, Secs. 1061, 1062(b),

clarified amendments by Pub. L. 100-242, Secs. 405(1), 406(b)(1)(B).

Pub. L. 100-242, Sec. 406(b)(1)(A), struck out ``(whether or not

such one- or two-family residence may be intended to be rented

temporarily for school purposes)'' after ``in the case of a two-family

residence'' in first sentence.

Pub. L. 100-242, Sec. 404, substituted ``150 percent'' for ``133\1/

3\ per centum'' in cl. (A) of first sentence.

Pub. L. 100-242, Sec. 423, inserted definition of ``area''.

Pub. L. 100-242, Sec. 406(b)(1)(B), struck out ``to be occupied as

the principal residence of the owner'' after ``residence''.

Pub. L. 100-242, Sec. 405(1), which directed insertion of ``, except

that persons enlisting in the armed forces after September 7, 1980, or

entering active duty after October 16, 1981, shall have their

eligibility determined in accordance with section 3103A(d) of title 38''

before period at end of first undesignated paragraph, was executed by

making the insertion after ``other than dishonorable'' at end of

sentence defining ``veteran'', to reflect the probable intent of

Congress.

Subsec. (b)(8). Pub. L. 100-242, Sec. 406(b)(2), struck out par. (8)

which related to eligibility for insurance of a mortgage in the case of

a mortgagor who is not occupant of the property.

Subsec. (c). Pub. L. 100-242, Sec. 403, inserted provisions at end

relating to total premium charge to be fixed by Secretary in case of any

mortgage secured by 1- to 4-family dwelling.

Subsec. (g). Pub. L. 100-242, Sec. 406(a), added subsec. (g).

Subsec. (g)(3)(F). Pub. L. 100-628, Sec. 1062(a), added subpar. (F).

Subsec. (h). Pub. L. 100-707, Sec. 109(e)(2), struck out ``riot or

civil disorder'' after ``hurricane, earthquake, storm,'' and substituted

``5170'' for ``5141''.

Pub. L. 100-242, Sec. 406(b)(3), struck out ``is the owner and

occupant and'' after ``where the mortgagor''.

Subsec. (i). Pub. L. 100-242, Sec. 406(b)(4), struck out ``Provided,

That if the mortgagor is not the occupant of the property at the time of

insurance, the principal obligation of the mortgage shall not exceed 85

per centum of the appraised value of the property:'' after ``for a

single-family residence:'' and substituted ``Provided, That the

Secretary'' for ``Provided further, That the Secretary''.

Subsec. (k)(3)(B). Pub. L. 100-242, Sec. 429(c), substituted

``borrower and the financial institution'' for ``mortgagor and the

mortgagee''.

Subsec. (m). Pub. L. 100-242, Sec. 406(c), struck out subsec. (m)

which related to insurance of mortgages on dwellings that need not be

designed for year-round occupancy.

Subsec. (o)(2). Pub. L. 100-242, Sec. 406(b)(5), substituted

``owner'' for ``owner occupant'' in first sentence.

Subsec. (p)(2). Pub. L. 100-242, Sec. 406(b)(6), substituted

``owner'' for ``owner-occupant'' in first sentence.

Subsec. (q)(1). Pub. L. 100-242, Sec. 422(b), substituted

``Secretary shall'' for ``Secretary may''.

Subsec. (r). Pub. L. 100-242, Sec. 407(a)(1), added subsec. (r).

Subsec. (r)(2)(A), (B). Pub. L. 100-628, Sec. 1063(a), substituted

``date on which the mortgage is executed'' for ``date on which the

mortgage is endorsed for insurance''.

1986--Subsec. (q). Pub. L. 99-601 added subsec. (q).

1984--Subsec. (n)(2)(A). Pub. L. 98-479 substituted ``a'' for ``an''

before ``cooperative ownership''.

1983--Subsec. (b)(2). Pub. L. 98-181, Sec. 424(a), struck out

``(except as provided in the next to the last sentence of this

paragraph)'' and inserted ``(except as otherwise provided in this

paragraph)'' and inserted after first sentence ``If the mortgage to be

insured under this section covers property on which there is located a

one- to four-family residence to be occupied as the principal residence

of the owner, and the appraised value of the property, as of the date

the mortgage is accepted for insurance, does not exceed $50,000, the

principal obligation may be in an amount not to exceed 97 percent of

such appraised value.''

Pub. L. 98-181, Sec. 423(b)(1), struck out ``: Provided, That the

foregoing maximum mortgage amounts may be increased by the amount of the

mortgage insurance premium paid at the time the mortgage is insured''

after ``150 per centum of such median price''.

Subsec. (b)(5). Pub. L. 98-181, Sec. 404(b)(2), substituted

provision that the interest rate be at such rate as agreed upon by the

mortgagor and the mortgagee for provision that the interest rate,

exclusive of premium charges for insurance and service charges if any,

not exceed 5 per centum per annum on the amount of the principal

obligation outstanding at any time, or not exceed such per centum per

annum not in excess of 6 per centum as the Secretary finds necessary to

meet the mortgage market.

Subsec. (b)(8). Pub. L. 98-181, Sec. 425, substituted ``the lesser

of (A) the otherwise applicable maximum dollar amount prescribed under

paragraph (2), or (B) 85 percent of the appraised value of the property

as of the date the mortgage is accepted for insurance'' for ``85 per

centum of the amount computed under the provisions of paragraph (2) of

this subsection''.

Subsec. (c). Pub. L. 98-181, Sec. 447, inserted ``(1) under section

1715z-10, 1715z-12, 1715z-16, 1715z-17, or 1715z-18 of this title, or

any other financing mechanism providing alternative methods for

repayment of a mortgage that is determined by the Secretary to involve

additional risk, or (2)'' after ``fixed for insurance''.

Subsec. (d). Pub. L. 98-181, Sec. 423(a), added subsec. (d).

Subsec. (h). Pub. L. 98-63 substituted ``the applicable maximum

dollar limit under subsection (b) of this section'' for ``$14,400''.

Subsec. (k)(3)(B). Pub. L. 98-181, Sec. 404(b)(3), substituted

provision that interest be at such a rate as agreed upon by the

mortgagor and mortgagee for provision that interest be at a rate

permitted by the Secretary for mortgages insured under this section,

except that the Secretary could permit a higher rate with respect to the

period beginning with the making of the loan and ending with the

completion of the rehabilitation or such earlier time as determined by

the Secretary.

Subsec. (n)(1). Pub. L. 98-181, Sec. 419(1), inserted ``or the

construction of which was completed more than a year prior to the

application for the mortgage insurance'' after ``under this chapter''.

Subsec. (n)(2)(A). Pub. L. 98-181, Sec. 419(2), struck out

``nonprofit'' before ``cooperative''.

1982--Subsec. (b)(2). Pub. L. 97-253, Sec. 201(a)(1), inserted

provision that the foregoing maximum mortgage amounts may be increased

by the amount of the mortgage insurance premium paid at the time the

mortgage is insured.

Subsec. (b)(9). Pub. L. 97-253, Sec. 201(a)(2), inserted

``(excluding the mortgage insurance premium paid at the time the

mortgage is insured)'' after ``cost of acquisition''.

Subsec. (c). Pub. L. 97-253, Sec. 201(b), inserted provision that

with respect to mortgages for which the Secretary requires, at the time

the mortgage is insured, the payment of a single premium charge to cover

the total premium obligation for the insurance of the mortgage, and on

which the principal obligation is paid before the number of years on

which the premium with respect to a particular mortgage was based, or

the property is sold subject to the mortgage or is sold and the mortgage

is assumed prior to such time, the Secretary shall provide for refunds,

where appropriate, of a portion of the premium paid and shall provide

for appropriate allocation of the premium cost among the mortgagors over

the term of the mortgage, in accordance with procedures established by

the Secretary which take into account sound financial and actuarial

considerations.

1980--Subsec. (b)(2). Pub. L. 96-399, Sec. 336(a), inserted

provisions authorizing the Secretary to increase maximum dollar amounts

with respect to four-family residences.

Subsec. (b)(3). Pub. L. 96-399, Sec. 333(a), struck out provisions

relating to applicability to criteria of three-quarters of the

Secretary's estimate of the remaining economic life of the building

improvements.

Subsec. (k)(5). Pub. L. 96-399, Sec. 321, substituted provisions

relating to insurance benefits paid with respect to loans secured by a

first mortgage, and insured under this subsection, and those secured by

a mortgage other than a first mortgage, and insured under this

subsection, for provisions relating to insurance benefits paid with

respect to loans insured under this subsection.

Subsec. (p). Pub. L. 96-399, Sec. 328, added subsec. (p).

1979--Subsec. (b)(2). Pub. L. 96-153, Secs. 310, 312(a), excepted

dwellings covered by a consumer protection or warranty plan acceptable

to the Secretary and satisfying all requirements which would have been

applicable if such dwellings had been approved for mortgage insurance

prior to the beginning of construction from the limit on the maximum

amount of mortgage on dwellings not approved for mortgage insurance

prior to the beginning of construction, and substituted ``$67,500'' for

``$60,000'', ``$76,000'' for ``$65,000'' where it first appeared,

``$92,000'' for ``$65,000'' where it appeared the second time, and

``$107,000'' for ``$75,000''.

Subsec. (i). Pub. L. 96-153, Sec. 318, substituted ``two and one-

half or more acres in size adjacent to an all-weather public road'' for

``five or more acres in size adjacent to a public highway'' in last

proviso.

1978--Subsec. (b)(2). Pub. L. 95-619 inserted provision that the

amount insurable under this section could be increased by up to 20 per

centum if such increase were necessary to account for the increased cost

of a residence due to the installation of a solar energy system.

Subsec. (c). Pub. L. 95-557, Sec. 101(c)(2), substituted

``subsections (n) and (k) of this section are not required'' for

``subsection (n) of this section is not required'' and ``subsection (n)

or (k) of this section exceed 1 per centum'' for ``subsection (n) of

this section exceed 1 per centum''.

Subsec. (k). Pub. L. 95-557, Sec. 101(c)(1), generally revised

subsec. (k) to meet the credit needs of owners of from one-to-four

family properties who can afford market rate borrowing by insuring one

hundred percent of the loan amount and covering the cost of

rehabilitation, rehabilitation and refinancing existing debt, or the

purchase and rehabilitation of properties.

1977--Subsec. (b)(2). Pub. L. 95-128, Secs. 303(a), 304(a),

substituted ``$60,000'' for ``$45,000'', ``$65,000'' for ``$48,750''

wherever appearing, and ``$75,000'' for ``$56,000'' in provisions

preceding cl. (i); struck out in cl. (i) following ``97 per centum''

parenthetical text ``(but, in any case where the dwelling is not

approved for mortgage insurance prior to the beginning of construction,

unless the construction of the dwelling was completed more than one year

prior to the application for mortgage insurance, or the dwelling was

approved for guaranty, insurance, or direct loan under chapter 37 of

title 38 prior to the beginning of construction, 90 per centum)'';

substituted in first sentence ``and (ii) 95 per centum of such value in

excess of $25,000'' for ``(ii) 90 per centum of such value in excess of

$25,000 but not in excess of $35,000, and (iii) 80 per centum of such

value in excess of $35,000'' and in second sentence ``and (ii) 95 per

centum of such value in excess of $25,000'' for ``(ii) 90 per centum of

such value in excess of $25,000 but not in excess of $35,000, and (iii)

85 per centum of such value in excess of $35,000''; and inserted

following the second sentence provision limiting the mortgage to 90 per

centum of the entire appraised value of the property as of the date the

mortgage is accepted for insurance where the dwelling is not approved

for mortgage insurance prior to the beginning of construction.

Subsec. (c). Pub. L. 95-128, Sec. 305, inserted proviso respecting

premium charges for insurance under subsec. (n) of this section.

Subsec. (i). Pub. L. 95-128, Sec. 303(g), substituted provision

which authorizes the Secretary to insure a mortgage hereunder which

involves a principal obligation not in excess of 75 per centum of the

limit on the principal obligation applicable to a one-family residence

under subsec. (b) of this section for prior limitation of such insurance

on a mortgage which involved a principal obligation not in excess of

$16,200.

Subsec. (o). Pub. L. 95-128, Sec. 307, added subsec. (o).

1974--Subsec. (b)(2). Pub. L. 93-383, Sec. 302(a), substituted

``$45,000'' for ``$33,000'', ``$48,750'' for ``$35,750'' wherever

appearing therein, and ``$56,000'' for ``$41,250'' in provisions

preceding cl. (i).

Subsec. (b)(2)(i). Pub. L. 93-383, Sec. 310(a)(1), substituted

``$25,000'' for ``$15,000'' in first and second sentences.

Subsec. (b)(2)(ii). Pub. L. 93-383, Sec. 310(a)(2), substituted

``$25,000'' for ``$15,000'' and ``$35,000'' for ``$25,000'' in first and

second sentences.

Subsec. (b)(2)(iii). Pub. L. 93-383, Sec. 310(a)(3), substituted

``$35,000'' for ``$25,000'' in first and second sentences.

Subsec. (h). Pub. L. 93-288 substituted ``sections 5122(2) and 5141

of title 42'' for ``section 4402(1) of title 42''.

Subsec. (n). Pub. L. 93-449 added subsec. (n).

1970--Subsec. (h). Pub. L. 91-606 substituted reference to section

``4402(1)'' for ``1855a(a)'' of title 42.

1969--Subsec. (b)(2). Pub. L. 91-152, Secs. 102(a), 113(a)(1),

substituted ``$25,000'' for ``$20,000'' wherever appearing, ``$33,000''

for ``$30,000'', ``$35,750'' for ``$32,500'' wherever appearing, and

``$41,250'' for ``$37,500''.

Subsec. (h). Pub. L. 91-152, Sec. 113(a)(2), substituted ``$14,400''

for ``$12,000''.

Subsec. (i). Pub. L. 91-152, Sec. 113(a)(3), substituted ``$16,200''

for ``$13,500''.

Subsec. (m). Pub. L. 91-152, Sec. 113(a)(4), substituted ``$18,000''

for ``$15,000''.

1968--Subsec. (h). Pub. L. 90-448, Sec. 1106(d), authorized

insurance of mortgages for reconstruction of homes destroyed or damaged

as a result of riot or civil disorder.

Subsec. (i). Pub. L. 90-448, Sec. 317, substituted ``$13,500'' for

``$12,500''.

Subsec. (l). Pub. L. 90-448, Sec. 103(b), repealed subsec. (l) which

authorized insurance of mortgages in areas affected by civil disorders.

See section 1715n(e) of this title.

Subsec. (m). Pub. L. 90-448, Sec. 318, added subsec. (m).

1967--Pub. L. 90--19, Sec. 1(a)(3), substituted ``Secretary'' for

``Commissioner'' wherever appearing in subsecs. (a), (b)(1) to (9), (c),

(e), (h), (i), and (k).

Subsec. (b)(3), (9). Pub. L. 90--19, Sec. 1(a)(4), substituted

``Secretary's'' for ``Commissioner's''.

1966--Subsec. (b)(2). Pub. L. 89-754, Sec. 301, substituted ``If the

mortgagor is a veteran,'' for ``If the mortgagor is a veteran who has

not received any direct, guaranteed, or insured loan under laws

administered by the Veterans' Administration for the purchase,

construction, or repair of a dwelling (including a farm dwelling) which

was to be owned and occupied by him as his home,''.

Subsec. (l). Pub. L. 89-754, Sec. 302, added subsec. (l).

1965--Subsec. (b)(2). Pub. L. 89-117, Secs. 203, 206(a), substituted

``and (except as provided in the next to the last sentence of this

paragraph) not to exceed'' for ``and not to exceed'', and ``80 per

centum'' for ``75 per centum'', and inserted provisions prescribing the

amount of the principal obligation for veterans and defining

``veteran''.

Subsec. (b)(9). Pub. L. 89-117, Secs. 204, 206(b), inserted

``(except in a case to which the next to the last sentence of paragraph

(2) applies)'' and ``or with respect to a mortgage covering a single-

family home being purchased under the low-income housing demonstration

project assisted pursuant to section 1436 of title 42''.

Subsec. (i). Pub. L. 89-117, Sec. 205, substituted ``$12,500'' for

``$11,000''.

Subsec. (k). Pub. L. 89-117, Sec. 1108(c), substituted ``the General

Insurance Fund'' for ``a separate section 203 Home Improvement Account

to be maintained as hereinafter provided under the Mutual Mortgage

Insurance Fund'' in cl. (3) of the first sentence and ``the General

Insurance Fund or in debentures executed in the name of such Fund'' for

``the section 203 Home Improvement Account or in debentures executed in

the name of such Account'' in cl. (4), and removed references to section

220 Housing Insurance Fund and section 203 Home Improvement Account

elsewhere in the subsec., including provisions for the funding of a

special revolving fund for carrying out the provisions of the subsec.

1964--Subsec. (b)(2). Pub. L. 88-560, Sec. 102(a), increased maximum

amount of the principal obligation for one-family residences from

$25,000 to $30,000, for two-family residences from $27,500 to $32,500,

for three-family residences from $27,500 to $32,500, and for four-family

residences from $35,000 to $37,500.

Subsec. (i). Pub. L. 88-560, Sec. 102(b), increased maximum amount

of the principal obligation from $9,000 to $11,000.

Subsec. (k). Pub. L. 88-560, Secs. 103, 105(c)(1), substituted in

cl. (2) ``an acceptable risk'' for ``economically sound'', in cl. (4)

provision for payment of insurance benefits ``in cash out of the Section

203 Home Improvement Account or in debentures executed in the name of

such Account'' for provision for such payment ``in debentures executed

in the name of the Section 203 Home Improvement Account'', and in the

third sentence ``Insurance benefits paid with respect to loans insured

under this subsection shall be paid'' for ``Debentures issued with

respect to loans insured under this subsection shall be issued''; and

inserted the provision that ``If the insurance payment is made in cash,

there shall be added to such payment an amount equivalent to the

interest which the debentures would have earned, computed to a date to

be established pursuant to regulations issued by the Commissioner.'',

respectively.

1961--Subsec. (a). Pub. L. 87-70, Sec. 604(b), struck out proviso

which limited the aggregate amount of principal obligations of all

mortgages insured under this chapter to not more than $7,750,000,000,

and which permitted additional increases in such sum by not more than

$1,250,000,000 in the aggregate.

Subsec. (b)(2). Pub. L. 87-70, Sec. 605(a), (b), increased maximum

amount of the principal obligation for one-family residences from

$22,500 to $25,000, and for two-family residences from $25,000 to

$27,500, and substituted ``$15,000'' for ``$13,500'' in two places,

``$20,000'' for ``$18,000'' in two places, and ``75 per centum'' for

``70 per centum''.

Subsec. (b)(3). Pub. L. 87-70, Secs. 605(c), 612(a)(1), substituted

``thirty-five years (or thirty years if such mortgage is not approved

for insurance prior to construction) from the date of the beginning of

amortization of the mortgage'' for ``thirty years from the date of the

insurance of the mortgage''.

Subsec. (c). Pub. L. 87-70, Secs. 606, 612(a)(2), reduced minimum

premium charge from an amount equivalent to one-half of 1 per centum per

annum to an amount equivalent to one-fourth of 1 per centum per annum,

permitted the Commissioner to make the reduced premium charge applicable

to each insured mortgage outstanding under the section or sections

involved at the time the reduced charge is fixed, struck out provisos

which related to premium charges for mortgages insured prior to Feb. 3,

1938, and for mortgages described in section 203(b)(2)(B) of the

National Housing Act accepted for insurance prior to July 1, 1939, and

substituted ``particular insurance fund or account'' for ``particular

insurance fund'' in the first proviso of the second sentence.

Subsec. (e). Pub. L. 87-70, Sec. 102(b)(1), (2), substituted

``eligibility of the loan or mortgage'' for ``eligibility of the

mortgage'', and ``approved financial institution or approved mortgagee''

for ``approved mortgagee'' in two places.

Subsec. (k). Pub. L. 87-70 Sec. 102(b)(3), added subsec. (k).

1959--Subsec. (b)(2). Pub. L. 86-372, Sec. 102(a), increased maximum

amount of the principal obligation for one-family residences from

$20,000 to $22,500, and for two-family residences from $20,000 to

$25,000, increased the maximum amount of loans over $13,500 from 85 per

centum of the value in excess of $13,500 but not in excess of $16,000 to

90 per centum of the value in excess of $13,500 but not in excess of

$18,000, and inserted provisions relating to dwellings approved for

guaranty, insurance, or direct loan under chapter 37 of title 38 prior

to the beginning of construction.

Subsec. (b)(8). Pub. L. 86-372, Sec. 102(b), inserted proviso making

the 85 per centum limitation inapplicable if the mortgagor and mortgagee

assume responsibility for the reduction of the mortgage by an amount not

less than 15 per centum of the outstanding principal amount thereof in

the event the mortgaged property is not, prior to the due date of the

18th amortization payment of the mortgage, sold to a purchaser

acceptable to the Commissioner who is the occupant of the property and

who assumes and agrees to pay the mortgage indebtedness.

Subsec. (i). Pub. L. 86-372, Sec. 103, increased maximum amount of

the principal obligation from $8,000 to $9,000, inserted parenthetical

clause, and struck out provisions that limited the total amount of

insurance outstanding at any one time for farm homes to not more than

$100,000,000.

Subsec. (j). Pub. L. 86-372, Sec. 809, added subsec. (j).

1958--Subsec. (b)(2). Pub. L. 85-364 substituted ``$13,500'' for

``$10,000'' in two places.

1957--Subsec. (b)(2). Pub. L. 85-104, Sec. 101(a), increased maximum

amount of loan from 95 per centum of the first $9,000 plus 75 per centum

of excess above $9,000, to 97 per centum of the first $10,000 plus 85

per centum of the next $6,000 and 70 per centum of the remainder, and

struck out provisions authorizing President to increase former $9,000

figure to $10,000, eliminated provision that principal of mortgage shall

not exceed 85 per centum if mortgagor is not occupant of property, and

eliminated provision that mortgagor shall have paid at least 5 per

centum cash payment. See subsec. (b)(8), (9).

Subsec. (b)(8), (9). Pub. L. 85-104, Sec. 101(b), added pars. (8)

and (9).

Subsec. (d). Pub. L. 85-104, Sec. 106, repealed provisions which

related to insurance of mortgages on farm properties.

Subsec. (i). Pub. L. 85-104, Sec. 101(c), amended provisions

generally, and, among other changes, increased maximum loan from $6,650

to $8,000, and from 95 per centum to 97 per centum of value, and

substituted provisions that mortgage obligation shall not exceed 85 per

centum of value if mortgagor is not occupant, for provisions that (1)

mortgagor be the owner and occupant and had paid at least 5 per centum

cash, or (2) mortgagor be owner and occupant with whom a person or

corporation having satisfactory credit standing had contracted to pay on

his behalf all or part of downpayment, taking as security a note at not

more than 4 per centum interest, and to guarantee payment of insured

mortgage, or (3) to be the builder constructing the dwelling in which

case principal should not exceed 85 per centum of value or $5,950.

1956--Subsec. (b)(2). Act Aug. 7, 1956, Secs. 102(a), 104(a),

inserted ``unless the construction of the dwelling was completed more

than one year prior to the application for mortgage insurance'' before

``90 per centum'' in parenthetical clause, and inserted provision that

in cases where mortgagor is a person 60 years of age or older, the

downpayment required could be paid by a person other than the mortgagor

under conditions prescribed by the Commissioner.

Subsec. (h). Act Aug. 7, 1956, Sec. 102(b), substituted ``$12,000''

for ``$7,000''.

1954--Subsec. (b)(2). Act Aug. 2, 1954, Sec. 104, generally amended

provisions to provide, among others, for an increase in, and

equalization of, maximum mortgage amounts, with respect to new housing,

substitution of a loan to value ratio of 95 per centum of the $9,000 of

value plus 75 per centum of the balance in excess of $9,000, with

Presidential authority to increase the $9,000 figure to $10,000 under

certain conditions, and with respect to existing housing, substitution

of a loan to value ratio of 90 per centum of the first $9,000 of value

plus 75 per centum of the balance in excess of $9,000, with Presidential

authority to increase the $9,000 figure to $10,000, and inserted a

provision limiting the maximum loan to value ratio where the builder

becomes the mortgagor, not to exceed 85 per centum of the mortgage loan

which an owner-occupant could obtain.

Subsec. (b)(3). Act Aug. 2, 1954, Sec. 105, substituted a provision

for a maximum maturity of 30 years or three-quarters of the

Commissioner's estimate of the remaining economic life of the building

improvements, whichever is the lesser, for former provision carrying

varying limits ranging from twenty to thirty years.

Subsec. (b)(5). Act Aug. 2, 1954, Sec. 106, fixed maximum statutory

interest rate on mortgages at 5 per centum with authority in the

Commissioner to increase the rate to not to exceed 6 per centum as he

finds it necessary to meet the mortgage market; and permitted the

allowance of service charges.

Subsec. (c). Act Aug. 2, 1954, Sec. 107, provided that debentures

presented in payment of premium charges shall represent obligations of

the particular insurance fund to which such premium charges are to be

credited.

Subsec. (d). Act Aug. 2, 1954, Sec. 108, prohibited insurance of

mortgages pursuant to this subsection after Aug. 2, 1954, except

pursuant to commitments to insure issued on or before such date.

Subsecs. (f), (g). Act Aug. 2, 1954, Sec. 109, repealed subsec. (f)

which related to refinance mortgages and subsec. (g) which related to

higher loan to value ratio and longer maturity for single-family

residences. See subsecs. (b)(2) and (b)(3) of this section.

Subsecs. (h), (i). Act Aug. 2, 1954, Sec. 110, added subsecs. (h)

and (i).

1953--Subsec. (g). Act June 30, 1953, added subsec. (g).

1950--Act Apr. 20, 1950, Sec. 122, substituted ``Commissioner'' for

``Administrator'' wherever appearing.

Subsec. (a). Act Apr. 20, 1950, Sec. 103, increased statutory amount

of insurance authority from $6,750,000,000 to $7,500,000,000 and

provided that an additional $1,250,000,000 in insurance authority could

be made available with the authority of the President.

Subsec. (b)(2). Act Apr. 20, 1950, Sec. 104(a), inserted proviso to

clause (A) to allow the Commissioner to increase the dollar limitation

by not exceeding $4,500 for each additional family dwelling unit, in

excess of two located on such property, repealed clause (B), changed

``$9,500'' to read ``$9,450'', ``90'' to ``95'' in clause (C), and

changed clause (D) to provide that an insured mortgage could not exceed

$6,650 in amount and not exceed 95 per centum of the appraised value,

except that the Commissioner is given discretionary authority to

increase such dollar amount limitation by not exceeding $950 for each

additional bedroom in excess of two, and also to give Commissioner

authority to increase the insurance limitation in any geographical area

where he finds that cost levels so require.

1949--Subsec. (a). Joint Res. Oct. 25, 1949, substituted

``$6,000,000,000'' for ``$5,500,000,000'', and ``$6,750,000,000'' for

``$6,000,000,000''.

Act Aug. 30, 1949 substituted ``$5,500,000,000'' for

``$5,300,000,000'' and ``$6,000,000,000'' for ``$5,500,000,000''.

Act July 15, 1949, substituted ``$5,300,000,000'' for

``$4,000,000,000'' and ``$5,500,000,000'' for ``$5,000,000,000''.

1948--Subsec. (b)(2). Act Aug. 10, 1948, Sec. 101(g), (h)(1)-(3),

(j)(1), substituted ``$6,300'' for ``$5,400'' in subpar. (B),

substituted ``$9,500'' for ``$8,600'', ``$7,000'' for ``$6,000'', and

``$11,000'' for ``$10,000'' in subpar. (C), and added subpar. (D).

Subsec. (b)(3). Act Aug. 10, 1948, Sec. 101(i), (j)(2), substituted

``on property approved for insurance prior to the beginning of

construction'' for ``of the character described in paragraph (2)(B) of

this subsection'' and inserted ``or not to exceed thirty years in the

case of a mortgage insured under paragraph (2)(D) of this subsection'',

at the end thereof.

Subsec. (b)(5). Act Aug. 10, 1948, Sec. 101(j)(3), inserted ``or not

to exceed 4 per centum per annum in the case of a mortgage insured under

paragraph (2)(D) of this subsection, or not to exceed such percentum per

annum, not in excess of 5 per centum, as the Administrator finds

necessary to meet the mortgage market'' at the end thereof.

Subsec. (c). Act Aug. 10, 1948, Sec. 101(k)(1), (2), struck out of

last sentence ``under this section or section 1715a of this title''

after ``accepted for insurance'' and ``and a mortgage on the same

property is accepted for insurance at the time of such payment'' after

``herein set forth''.

1946--Subsec. (a). Act July 1, 1946, struck out second and third

provisos providing for a limitation on the aggregate amount of mortgages

outstanding, and limiting insuring of mortgages after July 1, 1946,

respectively.

1943--Subsec. (a). Act Oct. 15, 1943, substituted ``1946'' for

``1944'' in third proviso.

1941--Subsec. (a). Act June 28, 1941, substituted ``$4,000,000,000''

for ``$3,000,000,000'', ``$5,000,000,000'' for ``$4,000,000,000''; and

affected second and third provisos.

1939--Subsec. (a). Act June 3, 1939, Sec. 6, substituted

``$3,000,000'' for ``$2,000,000'', ``$4,000,000'' for ``$3,000,000'',

generally revised second proviso and inserted third proviso.

Subsec. (b)(3). Act June 3, 1939, Sec. 7, struck out ``until July 1,

1939''.

Subsecs. (e), (f). Act June 3, 1939, Sec. 8, added subsecs. (e) and

(f).

1938--Subsecs. (a) to (d). Act Feb. 3, 1938, amended provisions

generally.

1935--Subsec. (a)(1). Act Aug. 23, 1935, inserted ``property and''

before ``project''.

Subsec. (c). Act May 28, 1935, inserted part of last sentence before

the semicolon.



Effective Date of 2001 Amendment


Pub. L. 107-73, title II, Sec. 207(b), Nov. 26, 2001, 115 Stat. 675,

provided that: ``The amendments made by subsection (a) [amending this

section] shall--

``(1) apply only to mortgages that are executed on or after the

date of enactment of this Act [Nov. 26, 2001]; and

``(2) be implemented in advance of any necessary conforming

changes to regulations.''



Applicability of 1994 Amendment


Title I of Pub. L. 103-211, Feb. 12, 1994, 108 Stat. 12, provided in

part that: ``For higher mortgage limits and improved access to mortgage

insurance for victims of the January 1994 earthquake in Southern

California, title II of the National Housing Act, as amended [12 U.S.C.

1707 et seq.], is further amended, as follows:

``(1) [Amended this section.]

``(2) [Amended this section.]

``(3) [Amended section 1715y of this title.]

``Eligibility for loans made under the authority granted by the

preceding paragraph [amending this section and section 1715y of this

title] shall be limited to persons whose principal residence was damaged

or destroyed as a result of the January 1994 earthquake in Southern

California: Provided, That the provisions under this heading [amending

this section and section 1715y of this title] shall be effective only

for the 18-month period following the date of enactment of this Act

[Feb. 12, 1994].''



Effective Date of 1992 Amendment


Section 503(b) of Pub. L. 102-550 provided that: ``The amendment

made by subsection (a) [amending this section] shall apply only to

mortgages executed on or after January 1, 1993.''

Section 506(b) of Pub. L. 102-550 provided that: ``The amendment

made by subsection (a) [amending this section] shall apply to mortgages

for which commitments for insurance are issued after the expiration of

the 12-month period beginning on the date of the enactment of this Act

[Oct. 28, 1992].''



Effective Date of 1990 Amendments


Section 326(b) of Pub. L. 101-625 provided that: ``The amendments

made by subsection (a) [amending this section] shall apply only with

respect to--

``(1) mortgages insured--

``(A) pursuant to a conditional commitment issued after the

expiration of the 60-day period beginning on the date of the

enactment of this Act [Nov. 28, 1990]; or

``(B) in accordance with the direct endorsement program, if

the approved underwriter of the mortgages signs the appraisal

report for the property after the expiration of the 60-day

period beginning on the date of the enactment of this Act; and

``(2) the approval of substitute mortgagors, if the original

mortgagor was subject to such amendments.''

Amendment by Pub. L. 101-402 deemed to have taken effect as if

enacted September 29, 1990, see section 1(a) of Pub. L. 101-494, set out

as an Effective Date of Temporary Extension of Emergency Low Income

Housing Preservation Act of 1987 and Correction of Any Repeal note under

section 1715l of this title.



Effective Date of 1989 Amendment


Section 132(b) of Pub. L. 101-235 provided that: ``The amendments

made by subsection (a) [amending this section] shall apply only with

respect to--

``(1) mortgages insured--

``(A) pursuant to a conditional commitment issued on or

after the date of the enactment of this Act [Dec. 15, 1989]; or

``(B) in accordance with the direct endorsement program (24

C.F.R. 200.163), if the approved underwriter of the mortgage

signs the appraisal report for the property on or after the date

of the enactment of this Act; and

``(2) the approval of substitute mortgagors, if the original

mortgagor was subject to such amendments.''

Section 143(c) of Pub. L. 101-235 provided that: ``The amendments

made by this section [amending this section] shall apply only with

respect to--

``(1) mortgages insured--

``(A) pursuant to a conditional commitment issued on or

after the date of the enactment of this Act [Dec. 15, 1989]; or

``(B) in accordance with the direct endorsement program, if

the approved underwriter of the mortgagee signs the appraisal

report for the property on or after the date of the enactment of

this Act; and

``(2) the approval of substitute mortgagors, if the original

mortgagor was subject to such amendments.''



Effective Date of 1988 Amendment


Section 406(d) of Pub. L. 100-242 provided that: ``The amendments

made by this section [amending this section and sections 1715d, 1715g,

1715k, 1715l, 1715m, 1715n, 1715y, and 1715z of this title] shall apply

only with respect to--

``(1) mortgages insured--

``(A) pursuant to a conditional commitment issued on or

after the date of the enactment of this Act [Feb. 5, 1988]; or

``(B) in accordance with the direct endorsement program (24

CFR 200.163), if the approved underwriter of the mortgagee signs

the appraisal report for the property on or after the date of

the enactment of this Act; and

``(2) the approval of substitute mortgagors, referred to in the

amendment made by subsection (a) [amending this section], if the

original mortgagor was subject to such amendment.''

Section 407(a)(2) of Pub. L. 100-242, as amended by Pub. L. 100-628,

title X, Sec. 1063(b), Nov. 7, 1988, 102 Stat. 3274, provided that:

``The amendment made by paragraph (1) [amending this section] shall

apply to each mortgage originated pursuant to an application for

commitment for insurance signed by the applicant on or after December 1,

1986.''



Effective Date of 1983 Amendment


Section 424(b) of Pub. L. 98-181 provided that: ``The amendment made

by subsection (a) [amending this section] shall take effect only if the

Secretary finds and reports to the Congress that such amendment, taking

into account the higher loan-to-value ratio resulting from the advance

payment of mortgage insurance premiums, will not adversely affect the

actuarial soundness of the Federal Housing Administration mortgage

insurance program.'' [For finding and report by Secretary and rule

implementing the amendments effective June 24, 1985, see 49 F.R. 39686

and 50 F.R. 19924.]

Section 423(c) of Pub. L. 98-181 provided that: ``The amendments

made by this section [amending this section and sections 1715e, 1715l,

1715y, and 1715z of this title] shall take effect only if the Secretary

of Housing and Urban Development determines that the program of advance

payment of insurance premiums, with specific regard to the effect of the

provisions authorized by the amendments made by such sections, is

actuarially sound.'' [For determination by Secretary and rule

implementing the amendments effective May 10, 1984, see 49 F.R. 12693.]



Effective Date of 1978 Amendment


Section 104 of Pub. L. 95-557 provided that: ``The amendments made

by this title [enacting section 5319 of Title 42, The Public Health and

Welfare, and amending this section, sections 1706e and 1717 of this

title, and sections 1452b, 5304, 5305, 5307, and 5318 of Title 42] shall

become effective October 1, 1978.''



Effective Date of 1974 Amendment


Amendment by Pub. L. 93-288 effective Apr. 1, 1974, see section 605

of Pub. L. 93-288, set out as an Effective Date note under section 5121

of Title 42, The Public Health and Welfare.



Effective Date of 1970 Amendment


Amendment by Pub. L. 91-606 effective Dec. 31, 1970, see section 304

of Pub. L. 91-606, set out as a note under section 165 of Title 26,

Internal Revenue Code.



Effective Date of 1949 Amendment


Amendment by act July 15, 1949, effective June 30, 1949, see section

202 of that act, set out as a note under section 1703 of this title.



Regulations


Pub. L. 105-276, title II, Sec. 225(b), Oct. 21, 1998, 112 Stat.

2490, provided that: ``The Secretary of Housing and Urban Development

shall develop the disclosure notice under subsection (a) [amending this

section] within 150 days of the enactment [Oct. 21, 1998] through notice

and comment rulemaking.''



Temporary Extension of FHA Mortgage Limit


Pub. L. 101-494, Sec. 4, Oct. 31, 1990, 104 Stat. 1185, provided

that:

``(a) Extension.--If upon enactment of this Act [see Effective Date

of 1990 Amendments note above], section 203(b)(2) of the National

Housing Act (12 U.S.C. 1709(b)(2)) provides for an increase in the

maximum dollar amount limitations on the principal obligations of

mortgages insured under such section until October 31, 1990, then

notwithstanding such section, such maximum dollar amount limitations may

be increased (to the percent specified in such section) until November

30, 1990.

``(b) Limitations.--If upon enactment of this Act such section

203(b)(2) [12 U.S.C. 1709(b)(2)] provides for an increase in the maximum

dollar amount limitations (referred to in subsection (a)) until a date

other than October 31, 1990, this section shall not apply. This section

shall not apply with respect to any amendment to section 203(b)(2) of

the National Housing Act made after the date of the enactment of this

Act [Oct. 31, 1990].''



Transition Provisions of 1990 Amendments


Section 326(c) of Pub. L. 101-625 provided that: ``Any mortgage

insurance provided under title II of the National Housing Act [this

subchapter] before the expiration of the 60-day period beginning on the

date of the enactment of this Act [Nov. 28, 1990], shall continue to be

governed (to the extent applicable) by the provisions of section

203(g)(1) of the National Housing Act [12 U.S.C. 1709(g)(1)], as such

provisions existed before the date of the enactment of this Act.''

Section 2103(b), (c) of Pub. L. 101-508, as amended by Pub. L. 102-

550, title I, Sec. 185(c)(3), title V, Sec. 507(b), Oct. 28, 1992, 106

Stat. 3748, 3782, provided that:

``(b) Transition Provisions.--Notwithstanding section 203(c) of the

National Housing Act [12 U.S.C. 1709(c)] (as amended by subsection (a)),

mortgage insurance premiums on mortgages executed during fiscal years

1991 through 1994 and that are obligations of the Mutual Mortgage

Insurance Fund or of the General Insurance Fund pursuant to section

203(v) of the National Housing Act shall be subject to the following

requirements:

``(1) 1991 and 1992.--For mortgages executed during fiscal years

1991 and 1992 (but after the date of the effectiveness of

regulations issued under subsection (c)), the Secretary shall

establish and collect the following premiums:

``(A) Up-front.--At the time of insurance, a single premium

payment in an amount not exceeding 3.80 percent of the amount of

the original insured principal obligation of the mortgage.

``(B) Annual.--In addition to the premium under subparagraph

(A), annual premium payments in an amount not exceeding 0.50

percent of the remaining insured principal balance (excluding

the portion of the remaining balance attributable to the premium

collected under subparagraph (A) and without taking into account

delinquent payments or prepayments), for any mortgage involving

an original principal obligation (excluding any premium

collected under subparagraph (A)) that is--

``(i) less than 90 percent of the appraised value of the

property (as of the date the mortgage is accepted for

insurance), for the first 5 years of the mortgage term;

``(ii) greater than or equal to 90 percent of such value

but equal to or less than 95 percent of such value, for the

first 8 years of the mortgage term; and

``(iii) greater than 95 percent of such value, for the

first 10 years of the mortgage term.

``(2) 1993 and 1994.--For mortgages executed during fiscal years

1993 and 1994, the Secretary shall establish and collect the

following premiums:

``(A) Up-front.--At the time of insurance, a single premium

payment in an amount not exceeding 3.00 percent of the amount of

the original insured principal obligation of the mortgage.

``(B) Annual.--In addition to the premium under subparagraph

(A), annual premium payments in an amount not exceeding 0.50

percent of the remaining insured principal balance (excluding

the portion of the remaining balance attributable to the premium

collected under subparagraph (A) and without taking into account

delinquent payments or prepayments), for any mortgage involving

an original principal obligation (excluding any premium

collected under subparagraph (A)) that is--

``(i) less than 90 percent of the appraised value of the

property (as of the date the mortgage is accepted for

insurance), for the first 7 years of the mortgage term;

``(ii) greater than or equal to 90 percent of such value

but equal to or less than 95 percent of such value, for the

first 12 years of the mortgage term; and

``(iii) greater than 95 percent of such value, for the

first 30 years of the mortgage term.

``(3) Refunds.--With respect to any mortgage subject to premiums

under this subsection, the Secretary shall refund all of the

unearned premium charges paid on a mortgage pursuant to paragraph

(1)(A) or (2)(A) upon payment in full of the principal obligation of

the mortgage prior to the maturity date.

``(c) Regulations.--The Secretary shall issue regulations to carry

out this section and the amendments made by this section [amending this

section] not later than the expiration of the 90-day period beginning on

the date of the enactment of this Act [Nov. 5, 1990].''



Transition Provisions of 1989 Amendment


Section 132(c) of Pub. L. 101-235 provided that: ``Any mortgage

insurance provided under title II of the National Housing Act [this

subchapter] as it existed immediately before the date of the enactment

of this Act [Dec. 15, 1989], shall continue to be governed (to the

extent applicable) by the provisions of section 203(r) of the National

Housing Act [12 U.S.C. 1709(r)], as such section existed immediately

before such date.''

Section 143(d) of Pub. L. 101-235 provided that: ``Any mortgage

insurance provided under title II of the National Housing Act [this

subchapter], as it existed immediately before the date of the enactment

of this Act [Dec. 15, 1989], shall continue to be governed (to the

extent applicable) by the provisions amended by subsections (a) and (b)

[amending this section] as such provisions existed immediately before

such date.''



Transition Provisions of 1988 Amendment


Section 406(e) of Pub. L. 100-242 provided that: ``Any mortgage

insurance provided under title II of the National Housing Act [this

subchapter], as it existed immediately before the date of the enactment

of this Act [Feb. 5, 1988], shall continue to be governed (to the extent

applicable) by the provisions specified in subsections (a) through (c)

[this section and sections 1715d, 1715g, 1715k, 1715l, 1715m, 1715n,

1715y, 1715z of this title], as such provisions existed immediately

before such date.''



Implementation of 1982 Amendment


Section 201(g) of Pub. L. 97-253 provided that: ``The amendments

made by this section [amending this section and sections 1715e, 1715l,

1715y, and 1715z of this title], other than by subsection (b) [amending

subsec. (c) of this section], may be implemented only if the Secretary

determines that the program of advance payment of insurance premiums,

with specific regard to the effect of the provisions authorized by the

amendments made by this section, is actuarially sound.''



Effect of Repeal of Subsec. (b)(2)(B) of This Section


Section 104(b) of act Apr. 20, 1950, provided that: ``The repeal of

section 203(b)(2)(B) of said Act [former subsection (b)(2)(B) of this

section], as provided by subsection (a) of this section, shall not

affect the right of the Commissioner to insure under said section any

mortgage (1) for the insurance of which application has been filed prior

to the effective date of this Act [Apr. 20, 1950], or (2) with respect

to a property covered by a mortgage insured under any section of the

National Housing Act, as amended [this chapter].''



Mutual Mortgage Insurance Fund Premiums


Pub. L. 103-66, title III, Sec. 3005, Aug. 10, 1993, 107 Stat. 340,

provided that: ``To improve the actuarial soundness of the Mutual

Mortgage Insurance Fund under the National Housing Act [12 U.S.C. 1701

et seq.], the Secretary of Housing and Urban Development shall increase

the rate at which the Secretary earns the single premium payment

collected at the time of insurance of a mortgage that is an obligation

of such Fund (with respect to the rate in effect on the date of the

enactment of this Act [Aug. 10, 1993]). In establishing such increased

rate, the Secretary shall consider any current audit findings and

reserve analyses and information regarding the expected average duration

of mortgages that are obligations of such Fund and may consider any

other information that the Secretary determines to be appropriate.''



Report on Home Equity Conversion Mortgages for the Elderly


Section 448 of Pub. L. 98-181 directed Secretary of Housing and

Urban Development to evaluate existing use of home equity conversion

mortgages for the elderly and, not later than the expiration of the 1-

year period following Nov. 30, 1983, submit to Congress a report setting

forth the results of such evaluation. Such report to include an

evaluation of whether use of such mortgages improves financial

situation, or otherwise meets special needs, of elderly homeowners; an

evaluation of any risks incurred by mortgagors as a result of use of

such mortgages, and any recommendations of Secretary for appropriate

safeguards to be included in such mortgages to minimize such risks; an

evaluation of the potential for acceptance of such mortgages in the

private market; and any recommendations of Secretary for establishment

of a Federal program of insuring such mortgages.



Studies of Mortgage Insurance Premiums and Alternatives to Statutory

Mortgage Amounts


Section 309 of Pub. L. 96-153 directed Secretary of Housing and

Urban Development to (a) conduct a study of the relative risks of loss

for various classes of mortgages which may be insured under sections

1709(b) and 213 of this title, for the purpose of making recommendations

on the advisability of reducing mortgage insurance premiums, and

transmit the recommendations to Congress within 18 months from Dec. 21,

1979, and (b) conduct a study of alternatives to the present system of

fixed statutory maximum amounts for mortgages insured under subchapters

I and II of this chapter and report to Congress on the results of the

study together with recommendations for legislative, by Mar. 1, 1980.



Insurance Program or Homeowners To Meet Mortgage Payments in Times of

Personal Economic Adversity


Pub. L. 90-448, Sec. 109, authorized Secretary of Housing and Urban

Development to develop a plan of insurance to help homeowners meet

mortgage payments in times of personal economic adversity, i.e., death,

disability, illness, and unemployment; required the program to be

actuarially sound through the use of premiums, fees, extended or

increased payment schedules, or other similar methods in conjunction

with federal participation as necessary; directed the Secretary to

report to Congress within 6 months of Aug. 1, 1968 and to recommend

legislation, authorizing him to contract with companies, corporations,

or joint enterprises formed to provide home mortgage insurance

protection for the purpose of reinsuring insurance reserve funds,

subsidizing premium payments for lower income mortgagors, or otherwise

making possible insurance protection of homeowners; and authorized the

Secretary, in preparing his recommendations, to consult with other

agencies or instrumentalities of the United States which insure or

guarantee home mortgages in order that any recommended legislation

afford equal benefits to mortgagors participating in their programs.


Section Referred to in Other Sections


This section is referred to in sections 1441a, 1701x, 1706c, 1707,

1708, 1710, 1711, 1712, 1713, 1715e, 1715k, 1715l, 1715m, 1715n, 1715q,

1715w, 1715x, 1715y, 1715z, 1715z-2, 1715z-3, 1715z-5, 1715z-10, 1715z-

12, 1715z-13, 1715z-14, 1715z-20, 1717, 1735, 1735b, 1735c, 1735f-17,

1735f-18, 1746, 1748h-1, 1748h-2, 1750b, 1831q, 2703 of this title;

title 15 sections 77d, 78c; title 38 section 3703; title 42 sections

1472, 1490k.




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