12usc1709

§ 1709

TITLE 12—BANKS AND BANKING

Subsec. (c)(2)(G). Pub. L. 106–377, § 1(a)(1) [title II,
§ 209(c)(3)], added subpar. (G).
1997—Subsec. (c)(3)(C). Pub. L. 105–65 inserted after
first sentence ‘‘Notwithstanding paragraph (4)(A), a
suspension shall be effective upon issuance by the
Board if the Board determines that there exists adequate evidence that immediate action is required to
protect the financial interests of the Department or the
public.’’
1992—Subsec. (b)(11). Pub. L. 102–550, § 502, added par.
(11).
Subsec. (c)(3)(C). Pub. L. 102–550, § 518, inserted ‘‘temporarily’’ after ‘‘order’’, ‘‘(i)’’ after ‘‘Administration
if’’, ‘‘(ii)’’ after ‘‘violations and’’, and ‘‘, and for not
longer than 1 year. The Board may extend the suspension for an additional 6 months if it determines the extension is in the public interest. If the Board and the
mortgagee agree, these time limits may be extended’’
after ‘‘6 months’’.
Subsec. (c)(6)(D). Pub. L. 102–550, § 519(1), struck out
subpar. (D) which read as follows: ‘‘For purposes of this
paragraph, the term ‘mortgagee’ means a mortgagee, a
branch office or subsidiary of a mortgagee, or a director, officer, employee, agent, or other person participating in the conduct of the affairs of such mortgagee.’’
Subsec. (c)(7), (8). Pub. L. 102–550, § 519(2), added par.
(7) and redesignated former par. (7) as (8).
1990—Subsec. (e)(3), (4). Pub. L. 101–625 added pars. (3)
and (4).
1989—Pub. L. 101–235 substituted ‘‘Federal Housing
Administration operations’’ for ‘‘Mutual Mortgage Insurance Fund’’ in section catchline, designated existing
provisions as subsec. (a) and inserted heading, and
added subsecs. (b) to (e).
1967—Pub. L. 90–19 substituted ‘‘Secretary’’ for ‘‘Commissioner’’ wherever appearing.
1950—Act Apr. 20, 1950, substituted ‘‘Commissioner’’
for ‘‘Administrator’’ wherever appearing.
1939—Act June 3, 1939, substituted ‘‘created’’ for ‘‘create’’.
1938—Act Feb. 3, 1938, inserted ‘‘with respect to mortgages insured under section 1709 of this title’’.
CHANGE OF NAME
Committee on Banking, Finance and Urban Affairs of
House of Representatives treated as referring to Committee on Banking and Financial Services of House of
Representatives by section 1(a) of Pub. L. 104–14, set
out as a note preceding section 21 of Title 2, The Congress. Committee on Banking and Financial Services of
House of Representatives abolished and replaced by
Committee on Financial Services of House of Representatives, and jurisdiction over matters relating to
securities and exchanges and insurance generally transferred from Committee on Energy and Commerce of
House of Representatives by House Resolution No. 5,
One Hundred Seventh Congress, Jan. 3, 2001.
EXPANDED REVIEW OF FHA MORTGAGEE APPLICANTS
AND NEWLY APPROVED MORTGAGEES
Pub. L. 111–22, div. A, title II, § 203(g), May 20, 2009, 123
Stat. 1648, provided that: ‘‘Not later than the expiration of the 3-month period beginning upon the date of
the enactment of this Act [May 20, 2009], the Secretary
of Housing and Urban Development shall—
‘‘(1) expand the existing process for reviewing new
applicants for approval for participation in the mortgage insurance programs of the Secretary for mortgages on 1- to 4-family residences for the purpose of
identifying applicants who represent a high risk to
the Mutual Mortgage Insurance Fund; and
‘‘(2) implement procedures that, for mortgagees approved during the 12-month period ending upon such
date of enactment—
‘‘(A) expand the number of mortgages originated
by such mortgagees that are reviewed for compliance with applicable laws, regulations, and policies;
and
‘‘(B) include a process for random reviews of such
mortgagees and a process for reviews that is based

Page 544

on volume of mortgages originated by such mortgagees.’’

§ 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 comply with the following:
(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, 115
percent of the median 1-family house price
in the area, as determined by the Secretary; and in the case of a 2-, 3-, or 4-family residence, the percentage of such median price that bears the same ratio to
such median price as the dollar amount
limitation determined under the sixth sentence of section 1454(a)(2) of this title for a
2-, 3-, or 4-family residence, respectively,
bears to the dollar amount limitation determined under such section for a 1-family
residence; or
(ii) 150 percent of the dollar amount limitation determined under the sixth sentence of such section 1454(a)(2) for a residence of applicable size;
except that the dollar amount limitation in
effect under this subparagraph for any size
residence for any area may not be less than
the greater of: (I) the dollar amount limitation in effect under this section for the area
on October 21, 1998; or (II) 65 percent of the
dollar amount limitation determined under
the sixth sentence of such section 1454(a)(2)
for a residence of the applicable size; and
(B) not to exceed 100 percent of the appraised value of the property.
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. 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.

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TITLE 12—BANKS AND BANKING

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.
(3) Have a maturity satisfactory to the Secretary, but not to exceed, in any event, thirtyfive 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,
§ 406(b)(2), Feb. 5, 1988, 101 Stat. 1900.
(9) CASH INVESTMENT REQUIREMENT.—
(A) IN GENERAL.—A mortgage insured
under this section shall be executed by a
mortgagor who shall have paid, in cash or its
equivalent, on account of the property an
amount equal to not less than 3.5 percent of
the appraised value of the property or such
larger amount as the Secretary may determine.
(B) FAMILY MEMBERS.—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, that—
(i) such lien shall be subordinate to the
mortgage; and
(ii) 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, in-

§ 1709

spection, and other fees in connection with
the mortgage.
(C) PROHIBITED SOURCES.—In no case shall
the funds required by subparagraph (A) consist, in whole or in part, of funds provided by
any of the following parties before, during,
or after closing of the property sale:
(i) The seller or any other person or entity that financially benefits from the
transaction.
(ii) Any third party or entity that is reimbursed, directly or indirectly, by any of
the parties described in clause (i).
This subparagraph shall apply only to mortgages for which the mortgagee has issued
credit approval for the borrower on or after
October 1, 2008.
(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 onefourth 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–10,1
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 subsection
(n) 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) 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
1 See

References in Text note below.

§ 1709

TITLE 12—BANKS AND BANKING

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.
(2) Notwithstanding any other provision of
this section, each mortgage secured by a 1- to 4family dwelling that is an obligation of the Mutual Mortgage Insurance Fund shall be subject
to the following requirements:
(A) The Secretary shall establish and collect, at the time of insurance, a single premium payment in an amount not exceeding 3
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 2.75 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, provided that the mortgagor refinances the unpaid principal obligation under this subchapter.
(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

Page 546

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
(1) Except as provided in paragraph (2) of this
subsection, notwithstanding 2 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.
(2) The maximum amount of a mortgage determined under subsection (b)(2)(B) of this section
may not be increased as provided in paragraph
(1).
(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) Disclosure of other mortgage products
(1) In general
In conjunction with any loan insured under
this section, an original lender shall provide
to each prospective borrower a disclosure notice that provides a 1-page analysis of mortgage products offered by that lender and for
which the borrower would qualify.
2 So

in original.

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TITLE 12—BANKS AND BANKING

(2) Notice
The notice required under paragraph (1)
shall include—
(A) a generic analysis comparing the note
rate (and associated interest payments), insurance premiums, and other costs and fees
that would be due over the life of the loan
for a loan insured by the Secretary under
subsection (b) of this section 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
(B) a statement regarding when the requirement of the mortgagor to pay the mortgage insurance premiums for a mortgage insured under this section would terminate, or
a statement that the requirement shall terminate only if the mortgage is refinanced,
paid off, or otherwise terminated.
(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 1 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

§ 1709

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) Repealed. Pub. L. 110–289, div. B, title I,
§ 2120(a)(1), July 30, 2008, 122 Stat. 2835
(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. 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),1 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

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TITLE 12—BANKS AND BANKING

(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 Mutual Mortgage 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. 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.

Page 548

(l) Repealed. Pub. L. 90–448, title I, § 103(b), Aug.
1, 1968, 82 Stat. 486
(m) Repealed. Pub. L. 100–242, title IV, § 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 or subordinate mortgage
or 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 or subordinate mortgage or 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) Repealed. Pub. L. 110–289, div. B, title I,
§ 2120(a)(2), July 30, 2008, 122 Stat. 2835
(p) Repealed. Pub. L. 110–289, div. B, title I,
§ 2120(a)(3), July 30, 2008, 122 Stat. 2835
(q) Repealed. Pub. L. 110–289, div. B, title I,
§ 2120(a)(4), July 30, 2008, 122 Stat. 2835
(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—

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TITLE 12—BANKS AND BANKING

(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) Transferred
(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

§ 1709

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’’ means a metropolitan
statistical area as established by the Office of
Management and Budget;
(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
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 Mutual Mortgage Insurance
Fund.
(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) 1 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

§ 1709

TITLE 12—BANKS AND BANKING

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, § 203, 48 Stat. 1248;
May 28, 1935, ch. 150, § 29(a), 49 Stat. 299; Aug. 23,
1935, ch. 614, title III, § 344(c), 49 Stat. 722; Feb. 3,
1938, ch. 13, § 3, 52 Stat. 10; June 3, 1939, ch. 175,
§§ 6–8, 53 Stat. 805, 806; June 28, 1941, ch. 261, § 8,
55 Stat. 365; Oct. 15, 1943, ch. 259, § 2, 57 Stat. 571;
July 1, 1946, ch. 531, 60 Stat. 408; Aug. 10, 1948, ch.
832, title I, § 101(g)–(k), 62 Stat. 1272; July 15,
1949, ch. 338, title II, § 201(2), 63 Stat. 421; Aug. 30,
1949, ch. 524, 63 Stat. 681; Oct. 25, 1949, ch. 729,
§ 1(2), 63 Stat. 905; Apr. 20, 1950, ch. 94, title I,
§§ 103, 104(a), 122, 64 Stat. 51, 59; June 30, 1953, ch.
170, § 3, 67 Stat. 121; Aug. 2, 1954, ch. 649, title I,
§§ 104–110, 68 Stat. 591, 592; Aug. 7, 1956, ch. 1029,
title I, §§ 102, 104(a), 70 Stat. 1091, 1092; Pub. L.
85–104, title I, §§ 101, 106, July 12, 1957, 71 Stat.
294, 297; Pub. L. 85–364, § 1(a), Apr. 1, 1958, 72 Stat.
73; Pub. L. 86–372, title I, §§ 102, 103, title VIII,
§ 809, Sept. 23, 1959, 73 Stat. 654, 688; Pub. L. 87–70,
title I, § 102(b), title VI, §§ 604(b), 605, 606, 612(a),
June 30, 1961, 75 Stat. 157, 177, 178, 180; Pub. L.
88–560, title I, §§ 102, 103, 105(c)(1), Sept. 2, 1964, 78
Stat. 769, 772; Pub. L. 89–117, title II, §§ 203–206,
title XI, § 1108(c), Aug. 10, 1965, 79 Stat. 466, 504;
Pub. L. 89–754, title III, §§ 301, 302, Nov. 3, 1966, 80
Stat. 1266; Pub. L. 90–19, § 1(a)(3), (4), May 25,
1967, 81 Stat. 17; Pub. L. 90–448, title I, § 103(b),
title III, §§ 317, 318, title XI, § 1106(d), Aug. 1, 1968,
82 Stat. 486, 512, 567; Pub. L. 91–152, title I,
§§ 102(a), 113(a), Dec. 24, 1969, 83 Stat. 379, 383;
Pub. L. 91–606, title III, § 301(c), Dec. 31, 1970, 84
Stat. 1758; Pub. L. 93–288, title VII, § 702(c), formerly title VI, § 602(c), May 22, 1974, 88 Stat. 163,
renumbered title VII, § 702(c), Pub. L. 103–337,
div. C, title XXXIV, § 3411(a)(1), (2), Oct. 5, 1994,
108 Stat. 3100; Pub. L. 93–383, title III, §§ 302(a),
310(a), Aug. 22, 1974, 88 Stat. 676, 682; Pub. L.
93–449, § 4(b), Oct. 18, 1974, 88 Stat. 1367; Pub. L.
95–128, title III, §§ 303(a), (g), 304(a), 305, 307, Oct.
12, 1977, 91 Stat. 1132, 1133, 1134; Pub. L. 95–557,

Page 550

title I, § 101(c)(1), (2), Oct. 31, 1978, 92 Stat. 2082,
2083; Pub. L. 95–619, title II, § 248(a), Nov. 9, 1978,
92 Stat. 3235; Pub. L. 96–153, title III, §§ 310,
312(a), 318, Dec. 21, 1979, 93 Stat. 1114, 1116, 1119;
Pub. L. 96–399, title III, §§ 321, 328, 333(a), 336(a),
Oct. 8, 1980, 94 Stat. 1646, 1651, 1653, 1654; Pub. L.
97–253, title II, § 201(a), (b), Sept. 8, 1982, 96 Stat.
789; Pub. L. 98–63, title I, § 101, July 30, 1983, 97
Stat. 321; Pub. L. 98–181, title IV, §§ 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, § 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, §§ 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,
§§ 1061–1063(a), Nov. 7, 1988, 102 Stat. 3274; Pub. L.
100–707, title I, § 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, §§ 132(a), 135,
143(a), (b), Dec. 15, 1989, 103 Stat. 2026, 2028, 2036;
Pub. L. 101–402, § 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, §§ 2101–2103(a), Nov. 5,
1990, 104 Stat. 1388–17; Pub. L. 101–625, title III,
§§ 326(a), 327, 329, 330(a), title IV, § 429, Nov. 28,
1990, 104 Stat. 4137, 4138, 4171; Pub. L. 102–40, title
IV, § 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, § 185(c)(1), title V,
§§ 503(a), 504–506(a), 507(a), title X, § 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, §§ 424, 425(a), 426, Sept.
26, 1996, 110 Stat. 2927, 2928; Pub. L. 105–65, title
II, § 211, Oct. 27, 1997, 111 Stat. 1366; Pub. L.
105–276, title II, §§ 212, 224, 225(a), 228, Oct. 21,
1998, 112 Stat. 2486, 2489–2491; Pub. L. 106–74, title
II, § 207, Oct. 20, 1999, 113 Stat. 1072; Pub. L.
106–281, § 2, Oct. 6, 2000, 114 Stat. 865; Pub. L.
106–377, § 1(a)(1) [title II, §§ 209(a), 225], Oct. 27,
2000, 114 Stat. 1441, 1441A–25, 1441A–30; Pub. L.
106–569, title XI, § 1103(f), Dec. 27, 2000, 114 Stat.
3031; Pub. L. 107–73, title II, § 207(a), Nov. 26, 2001,
115 Stat. 674; Pub. L. 107–326, § 2, Dec. 4, 2002, 116
Stat. 2792; Pub. L. 108–386, § 8(b), Oct. 30, 2004, 118
Stat. 2231; Pub. L. 108–447, div. I, title II, §§ 222,
223, Dec. 8, 2004, 118 Stat. 3321; Pub. L. 109–13,
div. A, title VI, § 6073, May 11, 2005, 119 Stat. 300;
Pub. L. 110–289, div. B, title I, §§ 2112(a), (b),
2113–2115, 2116(2), (3), 2118(b)(1), 2120(a)(1)–(4), (b),
2121, July 30, 2008, 122 Stat. 2830–2832, 2834, 2835.)
REFERENCES IN TEXT
Section 1715z–10 of this title, referred to in subsec.
(c)(1), was repealed by Pub. L. 110–289, div. B, title I,
§ 2120(a)(7), July 30, 2008, 122 Stat. 2835.
Section 1715m of this title, referred to in subsec.
(g)(2)(D), was repealed by Pub. L. 110–289, div. B, title I,
§ 2120(a)(5), July 30, 2008, 122 Stat. 2835.
Subsection (i) of this section, referred to in subsec.
(l), was repealed by Pub. L. 110–289, div. B, title I,
§ 2120(a)(1), July 30, 2008, 122 Stat. 2835.
Section 1711(g) of this title, referred to in subsec. (w),
was repealed by Pub. L. 110–289, div. B, title I,
§ 2118(c)(1), July 30, 2008, 122 Stat. 2835.
AMENDMENTS
2008—Subsec. (b)(2). Pub. L. 110–289, § 2112(a)(2), which
directed striking out second sentence in matter following subpar. (B) and all that followed through ‘‘section
3103A(d) of title 38’’, was executed in first undesignated

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TITLE 12—BANKS AND BANKING

par. after subpar. (B) by striking out ‘‘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. 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 extrahazardous 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.’’, to reflect
the probable intent of Congress and amendment by
Pub. L. 102–40. See 1991 Amendment note below.
Subsec. (b)(2)(A), (B). Pub. L. 110–289, § 2112(a)(1),
added subpars. (A) and (B) and struck out former subpars. (A) and (B) which related to maximum limits for
principal loan obligation.
Subsec. (b)(9). Pub. L. 110–289, § 2113, amended par. (9)
generally. Prior to amendment, par. (9) related to requirement that mortgagors other than veterans pay on
account of the property 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.
Subsec. (c)(2). Pub. L. 110–289, § 2114(1), in introductory provisions, struck out ‘‘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,,’’ after
‘‘Mutual Mortgage Insurance Fund’’.
Subsec. (c)(2)(A). Pub. L. 110–289, § 2114(2), substituted
‘‘3 percent’’ for ‘‘2.25 percent’’ and ‘‘2.75 percent’’ for
‘‘2.0 percent’’.
Subsec. (d). Pub. L. 110–289, § 2112(b), substituted ‘‘Except as provided in paragraph (2) of this subsection,
notwithstanding’’ for ‘‘Notwithstanding any’’, designated existing provisions as par. (1), and added par.
(2).
Subsec. (i). Pub. L. 110–289, § 2120(a)(1), struck out subsec. (i) which related to Secretary’s authority to insure
mortgages for single-family residences in suburban and
outlying areas or small communities and certain farm
homes.
Subsec. (k)(1). Pub. L. 110–289, § 2115(1), struck out ‘‘on
and after 180 days following October 31, 1978’’ after ‘‘financial institutions’’.
Subsec. (k)(5). Pub. L. 110–289, § 2115(2), substituted
‘‘Mutual Mortgage Insurance Fund’’ for ‘‘General Insurance Fund’’ and struck out ‘‘, 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’’ after ‘‘section 1710 of this
title’’.
Subsec. (n)(2)(A), (C). Pub. L. 110–289, § 2121, inserted
‘‘or subordinate mortgage or’’ before ‘‘lien’’.
Subsec. (o). Pub. L. 110–289, § 2120(a)(2), struck out
subsec. (o) which related to insurance of mortgages on

§ 1709

owner occupied homes in communities subject to adverse economic conditions resulting from Indian claims
to ownership of land and obligation of Special Risk Insurance Fund.
Subsec. (p). Pub. L. 110–289, § 2120(a)(3), struck out
subsec. (p) which related to 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.
Subsec. (q). Pub. L. 110–289, § 2120(a)(4), struck out
subsec. (q) which related to insurance of mortgages secured by property on certain lands leased by Seneca
Nation of New York Indians.
Subsec. (s). Pub. L. 110–289, § 2116(3), redesignated and
transferred subsec. (s) of this section to subsec. (e) of
section 1708 of this title.
Subsec. (s)(4). Pub. L. 110–289, § 2116(2), added par. (4)
and struck out former par. (4) which read as follows:
‘‘the Administrator of the Farmers Home Administration;’’.
Subsec. (u)(2)(A). Pub. L. 110–289, § 2120(b), substituted
‘‘means a metropolitan statistical area as established
by the Office of Management and Budget;’’ for ‘‘shall
have the meaning given the term under subsection
(b)(2) of this section;’’.
Subsec. (v). Pub. L. 110–289, § 2118(b)(1), substituted
‘‘The’’ for ‘‘Notwithstanding section 1708 of this title,
the’’ and ‘‘Mutual Mortgage Insurance Fund.’’ for
‘‘General Insurance Fund created pursuant to section
1735c of this title. The provisions of subsections (a)
through (h), (j), and (k) 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.’’
2005—Subsec. (c)(1). Pub. L. 109–13, § 6073(b)(2), struck
out ‘‘or (k)’’ after ‘‘(2) under subsection (n)’’ and
‘‘charges under subsection (n)’’.
Pub. L. 109–13, § 6073(b)(1), substituted ‘‘(2) under subsection (n)’’ for ‘‘(2) under subsections (n)’’.
Pub. L. 109–13, § 6073(a), repealed Pub. L. 108–447, § 222.
See note below.
2004–Subsec. (c)(1). Pub. L. 108–447, § 222, which directed the substitution of ‘‘subsection (n)’’ for ‘‘subsections (n) and (k)’’ and the striking out of ‘‘or (k)’’,
was repealed by Pub. L. 109–13, § 6073(a).
Subsec. (c)(2)(A). Pub. L. 108–447, § 223, inserted
‘‘, provided that the mortgagor refinances the unpaid
principal obligation under this subchapter’’ before period at end.
Subsec. (s)(5). Pub. L. 108–386 struck out ‘‘or District
bank’’ after ‘‘national bank’’.
2002—Subsec. (b). Pub. L. 107–326, § 2(1)(A), substituted
‘‘shall comply with the following:’’ for ‘‘shall—’’ in introductory provisions.
Subsec. (b)(2). Pub. L. 107–326, § 2(1)(C), transferred
text of subsec. (b)(10)(B) so as to appear as second sentence of concluding provisions in par. (2).
Pub. L. 107–326, § 2(1)(B)(ii)(III), in concluding provisions, struck out the eleventh sentence through the end
which read as follows: ‘‘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

§ 1709

TITLE 12—BANKS AND BANKING

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.’’
Pub. L. 107–326, § 2(1)(B)(ii)(II), in concluding provisions, struck out seventh through ninth sentences
which read as follows: ‘‘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.’’
Pub. L. 107–326, § 2(1)(B)(ii)(I), in concluding provisions, struck out second and third sentences which read
as follows: ‘‘If the mortgage to be insured under this
section covers property on which there is located a oneto 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.’’
Subsec. (b)(2)(A). Pub. L. 107–326, § 2(1)(B)(i), realigned
margins of matter that precedes cl. (ii).
Subsec. (b)(2)(B). Pub. L. 107–326, § 2(1)(B)(iii), added
subpar. (B) and struck out former subpar. (B) which
read as follows: ‘‘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.’’
Subsec. (b)(10). Pub. L. 107–326, § 2(1)(C), (D), transferred text of subpar. (B) so as to appear as second sentence of concluding provisions in subsec. (b)(2) and
struck out headings and text of remainder of par. (10)
which related to calculation of downpayment.
Subsec. (f). Pub. L. 107–326, § 2(2), added subsec. (f).
2001—Subsec. (c)(1). Pub. L. 107–73, § 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, § 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, § 1(a)(1) [title
II, § 225], substituted ‘‘mortgage closed on or before De-

Page 552

cember 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, § 1(a)(1) [title II,
§ 209(a)(2)], redesignated subsec. (s), relating to disclosure regarding interest due upon mortgage prepayment,
as (t).
Subsec. (t). Pub. L. 106–377, § 1(a)(1) [title II,
§ 209(a)(2)], redesignated subsec. (s), relating to disclosure regarding interest due upon mortgage prepayment,
as (t).
Pub. L. 106–377, § 1(a)(1) [title II, § 209(a)(1)], redesignated subsec. (t) as (u).
Subsec. (u). Pub. L. 106–377, § 1(a)(1) [title II,
§ 209(a)(1)], redesignated subsec. (t) as (u).
Subsec. (v). Pub. L. 106–377, § 1(a)(1) [title II,
§ 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, § 1(a)(1) [title
II, § 209(a)(3)]. See below.
Pub. L. 106–377, § 1(a)(1) [title II, § 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, § 225(a), inserted
at end undesignated par. relating to disclosure notice
furnished by original lender.
Subsec. (b)(2)(A). Pub. L. 105–276, § 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, § 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, § 212(1), substituted
‘‘CALCULATION OF DOWNPAYMENT’’ for ‘‘ALASKA AND HAWAII’’ in heading.
Subsec. (b)(10)(A). Pub. L. 105–276, § 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, § 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, § 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 ini-

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TITLE 12—BANKS AND BANKING

tial service charges, appraisal, inspection, and other
fees in connection with the mortgage’’.
Subsec. (b)(10). Pub. L. 104–204, § 426, added par. (10).
Subsec. (c)(2)(A). Pub. L. 104–204, § 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, § 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, § 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, § 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 2family 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

§ 1709

‘‘(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 fourfamily 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, § 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, § 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, § 507(a)(1), (2)(A),
substituted ‘‘not exceeding’’ for ‘‘equal to’’.
Subsec. (c)(2)(B)(ii). Pub. L. 102–550, § 507(a)(2)(B), substituted ‘‘not exceeding 0.55 percent’’ for ‘‘equal to 0.55
percent’’.
Subsec. (k)(2)(B). Pub. L. 102–550, § 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, § 504, added subsec. (v) relating to annual reports.

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TITLE 12—BANKS AND BANKING

Pub. L. 102–550, § 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, § 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, § 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, § 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, § 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, § 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, § 327, added par. (4).
Subsec. (s). Pub. L. 101–625, § 329, added subsec. (s) relating to disclosure regarding interest due upon mortgage prepayment.
Subsec. (t). Pub. L. 101–625, § 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, § 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 sec-

Page 554

tion 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, § 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, § 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, § 143(b)(2), redesignated par. (4) as (3). Former par. (3) redesignated (2).
Subsec. (r). Pub. L. 101–235, § 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, § 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, § 135, added subsec. (s).
1988—Subsec. (b)(2). Pub. L. 100–628, §§ 1061, 1062(b),
clarified amendments by Pub. L. 100–242, §§ 405(1),
406(b)(1)(B).
Pub. L. 100–242, § 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, § 404, substituted ‘‘150 percent’’ for
‘‘1331⁄3 per centum’’ in cl. (A) of first sentence.
Pub. L. 100–242, § 423, inserted definition of ‘‘area’’.
Pub. L. 100–242, § 406(b)(1)(B), struck out ‘‘to be occupied as the principal residence of the owner’’ after ‘‘residence’’.
Pub. L. 100–242, § 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, § 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, § 403, inserted provisions
at end relating to total premium charge to be fixed by
Secretary in case of any mortgage secured by 1- to 4family dwelling.
Subsec. (g). Pub. L. 100–242, § 406(a), added subsec. (g).
Subsec. (g)(3)(F). Pub. L. 100–628, § 1062(a), added subpar. (F).
Subsec. (h). Pub. L. 100–707, § 109(e)(2), struck out
‘‘riot or civil disorder’’ after ‘‘hurricane, earthquake,
storm,’’ and substituted ‘‘5170’’ for ‘‘5141’’.
Pub. L. 100–242, § 406(b)(3), struck out ‘‘is the owner
and occupant and’’ after ‘‘where the mortgagor’’.
Subsec. (i). Pub. L. 100–242, § 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’’.

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TITLE 12—BANKS AND BANKING

Subsec. (k)(3)(B). Pub. L. 100–242, § 429(c), substituted
‘‘borrower and the financial institution’’ for ‘‘mortgagor and the mortgagee’’.
Subsec. (m). Pub. L. 100–242, § 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, § 406(b)(5), substituted
‘‘owner’’ for ‘‘owner occupant’’ in first sentence.
Subsec. (p)(2). Pub. L. 100–242, § 406(b)(6), substituted
‘‘owner’’ for ‘‘owner-occupant’’ in first sentence.
Subsec. (q)(1). Pub. L. 100–242, § 422(b), substituted
‘‘Secretary shall’’ for ‘‘Secretary may’’.
Subsec. (r). Pub. L. 100–242, § 407(a)(1), added subsec.
(r).
Subsec. (r)(2)(A), (B). Pub. L. 100–628, § 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, § 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, § 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, § 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, § 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, § 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, § 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, § 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, § 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’’.

§ 1709

Subsec. (n)(2)(A). Pub. L. 98–181, § 419(2), struck out
‘‘nonprofit’’ before ‘‘cooperative’’.
1982—Subsec. (b)(2). Pub. L. 97–253, § 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, § 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, § 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, § 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, § 333(a), struck out provisions relating to applicability to criteria of threequarters of the Secretary’s estimate of the remaining
economic life of the building improvements.
Subsec. (k)(5). Pub. L. 96–399, § 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, § 328, added subsec. (p).
1979—Subsec. (b)(2). Pub. L. 96–153, §§ 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, § 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, § 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, § 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, §§ 303(a), 304(a),
substituted ‘‘$60,000’’ for ‘‘$45,000’’, ‘‘$65,000’’ for

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TITLE 12—BANKS AND BANKING

‘‘$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, § 305, inserted proviso respecting premium charges for insurance under subsec.
(n) of this section.
Subsec. (i). Pub. L. 95–128, § 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, § 307, added subsec. (o).
1974—Subsec. (b)(2). Pub. L. 93–383, § 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, § 310(a)(1), substituted
‘‘$25,000’’ for ‘‘$15,000’’ in first and second sentences.
Subsec. (b)(2)(ii). Pub. L. 93–383, § 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, § 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, §§ 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, § 113(a)(2), substituted
‘‘$14,400’’ for ‘‘$12,000’’.
Subsec. (i). Pub. L. 91–152, § 113(a)(3), substituted
‘‘$16,200’’ for ‘‘$13,500’’.
Subsec. (m). Pub. L. 91–152, § 113(a)(4), substituted
‘‘$18,000’’ for ‘‘$15,000’’.
1968—Subsec. (h). Pub. L. 90–448, § 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, § 317, substituted ‘‘$13,500’’
for ‘‘$12,500’’.
Subsec. (l). Pub. L. 90–448, § 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, § 318, added subsec. (m).
1967—Pub. L. 90—19, § 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, § 1(a)(4), substituted
‘‘Secretary’s’’ for ‘‘Commissioner’s’’.
1966—Subsec. (b)(2). Pub. L. 89–754, § 301, substituted
‘‘If the mortgagor is a veteran,’’ for ‘‘If the mortgagor

Page 556

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, § 302, added subsec. (l).
1965—Subsec. (b)(2). Pub. L. 89–117, §§ 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, §§ 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, § 205, substituted ‘‘$12,500’’
for ‘‘$11,000’’.
Subsec. (k). Pub. L. 89–117, § 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, § 102(a), increased
maximum amount of the principal obligation for onefamily 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, § 102(b), increased maximum amount of the principal obligation from $9,000 to
$11,000.
Subsec. (k). Pub. L. 88–560, §§ 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, § 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, § 605(a), (b), increased
maximum amount of the principal obligation for onefamily residences from $22,500 to $25,000, and for twofamily 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, §§ 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’’.

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TITLE 12—BANKS AND BANKING

Subsec. (c). Pub. L. 87–70, §§ 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, § 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 § 102(b)(3), added subsec. (k).
1959—Subsec. (b)(2). Pub. L. 86–372, § 102(a), increased
maximum amount of the principal obligation for onefamily residences from $20,000 to $22,500, and for twofamily 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, § 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, § 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, § 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, § 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, § 101(b), added pars.
(8) and (9).
Subsec. (d). Pub. L. 85–104, § 106, repealed provisions
which related to insurance of mortgages on farm properties.
Subsec. (i). Pub. L. 85–104, § 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 inter-

§ 1709

est, 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, §§ 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, § 102(b), substituted
‘‘$12,000’’ for ‘‘$7,000’’.
1954—Subsec. (b)(2). Act Aug. 2, 1954, § 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, § 105, substituted a
provision for a maximum maturity of 30 years or threequarters 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, § 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, § 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, § 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, § 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, § 110, added subsecs.
(h) and (i).
1953—Subsec. (g). Act June 30, 1953, added subsec. (g).
1950—Act Apr. 20, 1950, § 122, substituted ‘‘Commissioner’’ for ‘‘Administrator’’ wherever appearing.
Subsec. (a). Act Apr. 20, 1950, § 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, § 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.

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TITLE 12—BANKS AND BANKING

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, § 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, § 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, § 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, § 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, § 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, § 7, struck out ‘‘until
July 1, 1939’’.
Subsecs. (e), (f). Act June 3, 1939, § 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 2008 AMENDMENT
Pub. L. 110–289, div. B, title I, § 2112(c), July 30, 2008,
122 Stat. 2831, provided that: ‘‘The amendments made
by subsection (a) [amending this section] shall take effect upon the expiration of the date described in section
202(a) of the Economic Stimulus Act of 2008 (Public
Law 110–185; 122 Stat. 620) [Dec. 31, 2008].’’

Page 558

‘‘(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 18month 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 12month 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 2004 AMENDMENTS

EFFECTIVE DATE OF 1989 AMENDMENT

Pub. L. 108–447, div. I, title II, § 223, Dec. 8, 2004, 118
Stat. 3321, provided in part that: ‘‘This provision
[amending this section] shall apply to loans that become insured on or after date of enactment of this Act
[Dec. 8, 2004].’’
Amendment by Pub. L. 108–386 effective Oct. 30, 2004,
and, except as otherwise provided, applicable with respect to fiscal year 2005 and each succeeding fiscal
year, see sections 8(i) and 9 of Pub. L. 108–386, set out
as notes under section 321 of this title.

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.’’

EFFECTIVE DATE OF 2001 AMENDMENT
Pub. L. 107–73, title II, § 207(b), Nov. 26, 2001, 115 Stat.
675, provided that: ‘‘The amendments made by subsection (a) [amending this section] shall—

Page 559

§ 1709

TITLE 12—BANKS AND BANKING

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, § 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, formerly 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, § 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, § 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, § 185(c)(3), title V, § 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 prepay-

§ 1709

TITLE 12—BANKS AND BANKING

ments), 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,

Page 560

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].’’
LIMITATION ON MORTGAGE INSURANCE PREMIUM
INCREASES
Pub. L. 110–289, div. B, title I, § 2130, July 30, 2008, 122
Stat. 2842, provided that:
‘‘(a) IN GENERAL.—Notwithstanding any other provision of law, including any provision of this title [see
Short Title of 2008 Amendment note set out under section 1701 of this title] and any amendment made by this
title—
‘‘(1) for the period beginning on the date of the enactment of this title [July 30, 2008] and ending on October 1, 2009, the premiums charged for mortgage insurance under multifamily housing programs under
the National Housing Act [12 U.S.C. 1701 et seq.] may
not be increased above the premium amounts in effect under such program on October 1, 2006, unless the
Secretary of Housing and Urban Development determines that, absent such increase, insurance of additional mortgages under such program would, under
the Federal Credit Reform Act of 1990 [2 U.S.C. 661 et
seq.], require the appropriation of new budget authority to cover the costs (as such term is defined in section 502 of the Federal Credit Reform Act of 1990 (2
U.S.C. 661a)[)] of such insurance; and
‘‘(2) a premium increase pursuant to paragraph (1)
may be made only if not less than 30 days prior to
such increase taking effect, the Secretary of Housing
and Urban Development—
‘‘(A) notifies the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives of such increase; and
‘‘(B) publishes notice of such increase in the Federal Register.
‘‘(b) WAIVER.—The Secretary of Housing and Urban
Development may waive the 30-day notice requirement
under subsection (a)(2), if the Secretary determines
that waiting 30-days before increasing premiums would
cause substantial damage to the solvency of multifamily housing programs under the National Housing Act
[12 U.S.C. 1701 et seq.].’’
MUTUAL MORTGAGE INSURANCE FUND PREMIUMS
Pub. L. 103–66, title III, § 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 re-

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TITLE 12—BANKS AND BANKING

spect 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, § 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.

§ 1709–1. Repealed. Pub. L. 98–181, title IV,
§ 404(a), Nov. 30, 1983, 97 Stat. 1208
Section, Pub. L. 90–301, § 3(a), May 7, 1968, 82 Stat. 113;
Pub. L. 90–448, title III, § 315, Aug. 1, 1968, 82 Stat. 512;
Pub. L. 91–78, § 3, Sept. 30, 1969, 83 Stat. 125; Pub. L.
91–152, title IV, § 401, Dec. 24, 1969, 83 Stat. 394; Pub. L.

§ 1709–1a

91–351, title VI, § 601, July 24, 1970, 84 Stat. 461; Pub. L.
92–213, § 1, Dec. 22, 1971, 85 Stat. 775; Pub. L. 92–335, § 1,
July 1, 1972, 86 Stat. 405; Pub. L. 93–85, § 2, Aug. 10, 1973,
87 Stat. 220; Pub. L. 93–117, § 3, Oct. 2, 1973, 87 Stat. 422;
Pub. L. 93–234, title II, § 208, Dec. 31, 1973, 87 Stat. 984;
Pub. L. 93–383, title III, §§ 309(e), 317, Aug. 22, 1974, 88
Stat. 682, 685; Pub. L. 95–60, § 2, June 30, 1977, 91 Stat.
257; Pub. L. 95–80, § 2, July 31, 1977, 91 Stat. 339; Pub. L.
95–128, title III, § 302, Oct. 12, 1977, 91 Stat. 1131; Pub. L.
95–406, § 2, Sept. 30, 1978, 92 Stat. 880; Pub. L. 95–557, title
III, § 302, Oct. 31, 1978, 92 Stat. 2096; Pub. L. 96–71, § 2,
Sept. 28, 1979, 93 Stat. 501; Pub. L. 96–105, § 2, Nov. 8,
1979, 93 Stat. 794; Pub. L. 96–153, title III, § 302, Dec. 21,
1979, 93 Stat. 1112; Pub. L. 96–372, § 3, Oct. 3, 1980, 94
Stat. 1364; Pub. L. 96–399, title III, §§ 302, 332, Oct. 8, 1980,
94 Stat. 1639, 1652; Pub. L. 97–35, title III, § 332, Aug. 13,
1981, 95 Stat. 413; Pub. L. 97–289, § 2, Oct. 6, 1982, 96 Stat.
1231; Pub. L. 98–35, § 2, May 26, 1983, 97 Stat. 197; Pub. L.
98–109, § 2, Oct. 1, 1983, 97 Stat. 746, authorized the Secretary, until Dec. 1, 1983, to set the maximum interest
rates for certain mortgage insurance programs, notwithstanding the authority of the Secretary of Housing
and Urban Development to establish such rates, specified the criteria to be considered in establishing such
rates, authorized the Secretary to provide that the interest rate applicable under section 1709(b) of this title
be the negotiated interest rate specified in the commitment agreement, limited the amount of mortgages
with such negotiated interest rates which may be insured and prohibited such negotiated interest rates
with respect to mortgages subject to section 1715z–10 of
this title.
MORTGAGE CREDIT INTEREST RATES
Section 4 of Pub. L. 90–301, as amended by Pub. L.
90–565, Oct. 12, 1968, 82 Stat. 1001; Pub. L. 91–9, Apr. 11,
1969, 83 Stat. 7; Pub. L. 91–38, July 1, 1969, 83 Stat. 43,
which established a Commission to study mortgage interest rates and to make recommendations to assure
the availability of an adequate supply of mortgage
credit at a reasonable cost to the consumer, directed
the Commission to make an interim report not later
than July 1, 1969, and a final report of its study and recommendations not later than August 1, 1969, to enable
the President, Congress, and the Secretary of Housing
and Urban Development to take necessary action before October 1, 1969, when the authorization for the increase in interest rates above present statutory ceilings will expire, and provided that the Commission
cease to exist sixty days after the submission of its
final report, was repealed by Pub. L. 98–181, title IV,
§ 404(a), Nov. 30, 1983, 97 Stat. 1208.

§ 1709–1a. State constitutional and legal limits
upon interest chargeable on loans, mortgages, or other interim financing arrangements; applicability; covered arrangements
(a) The provisions of the constitution of any
State expressly limiting the amount of interest
which may be charged, taken, received, or reserved by certain classes of lenders and the provisions of any law of that State expressly limiting the amount of interest which may be
charged, taken, received, or reserved shall not
apply to—
(1) any loan or mortgage which is secured by
a one- to four-family dwelling and which is (A)
insured under title I or II [12 U.S.C. 1702 et seq.
or 1707 et seq.] of the National Housing Act, or
(B) insured, guaranteed, or made under chapter 37 of title 38; or
(2) any temporary construction loan or other
interim financing if at the time such loan is
made or financing is arranged, the intention
to obtain permanent financing substantially
by means of loans or mortgages so insured,
guaranteed, or made is declared.