12 USC 1701x

Page 457

TITLE 12—BANKS AND BANKING

tion since the establishment of mortgage insurance through the Federal Housing Administration.
The Congress commends the Department of
Housing and Urban Development for its recent
efforts to improve architectural standards
through competitive design awards and in other
ways but at the same time recognizes that this
important objective requires high priority if
Federal aid is to make its full communitywide
contribution toward improving our urban environment.
The Congress further finds that even within
the necessary budget limitations on housing for
low and moderate income families architectural
design could be improved not only to make the
housing more attractive, but to make it better
suited to the needs of occupants.
The Congress declares that in the administration of housing programs which assist in the
provision of housing for low and moderate income families, emphasis should be given to encouraging good design as an essential component of such housing and to developing housing
which will be of such quality as to reflect its important relationship to the architectural standards of the neighborhood and community in
which it is situated, consistent with prudent
budgeting.
(Pub. L. 90–448, § 4, Aug. 1, 1968, 82 Stat. 477.)
CODIFICATION
Section was enacted as part of the Housing and Urban
Development Act of 1968, and not as part of the National Housing Act which comprises this chapter.

§ 1701w. Budget, debt management, and related
counseling services for mortgagors; authorization of appropriations
The Secretary of Housing and Urban Development is authorized to provide, or contract with
public or private organizations to provide, such
budget, debt management, and related counseling services to mortgagors whose mortgages are
insured under section 1715z(i) or (j)(4) of this
title as he determines to be necessary to assist
such mortgagors in meeting the responsibilities
of homeownership. There are authorized to be
appropriated such sums as may be necessary to
carry out the provisions of this section.
(Pub. L. 90–448, title I, § 101(e), Aug. 1, 1968, 82
Stat. 484.)
CODIFICATION
Section was enacted as part of the Housing and Urban
Development Act of 1968, and not as part of the National Housing Act which comprises this chapter.

§ 1701x. Assistance with respect to housing for
low- and moderate-income families
(a) Authorization to provide information, advice,
and technical assistance; scope of assistance;
authorization of appropriations
(1) The Secretary is authorized to provide, or
contract with public or private organizations to
provide, information, advice, and technical assistance, including but not limited to—
(i) the assembly, correlation, publication,
and dissemination of information with respect
to the construction, rehabilitation, and operation of low- and moderate-income housing;

§ 1701x

(ii) the provision of advice and technical assistance to public bodies or to nonprofit or cooperative organizations with respect to the
construction, rehabilitation, and operation of
low- and moderate-income housing, including
assistance with respect to self-help and mutual self-help programs;
(iii) counseling and advice to tenants and
homeowners with respect to property maintenance, financial management, and such other
matters as may be appropriate to assist them
in improving their housing conditions and in
meeting the responsibilities of tenancy or
homeownership; and
(iv) the provision of technical assistance to
communities, particularly smaller communities, to assist such communities in planning,
developing, and administering Community Development Programs pursuant to title I of the
Housing and Community Development Act of
1974 [42 U.S.C. 5301 et seq.].
(2) The Secretary (A) shall provide the services
described in clause (iii) of paragraph (1) for
homeowners assisted under section 235 of the
National Housing Act [12 U.S.C. 1715z]; (B) shall,
in consultation with the Secretary of Agriculture, provide such services for borrowers who
are first-time homebuyers with guaranteed
loans under section 502(h) of the Housing Act of
1949 [42 U.S.C. 1472(h)]; and (C) may provide such
services for other owners of single family dwelling units insured under title II of the National
Housing Act [12 U.S.C. 1707 et seq.] or guaranteed or insured under chapter 37 of title 38. For
purposes of this paragraph and clause (iii) of
paragraph (1), the Secretary may provide the
services described in such clause directly or may
enter into contracts with, make grants to, and
provide other types of assistance to private or
public organizations with special competence
and knowledge in counseling low- and moderateincome families to provide such services.
(3) There is authorized to be appropriated for
the purposes of this subsection, without fiscal
year limitation, such sums as may be necessary;
except that for such purposes there are authorized to be appropriated $6,025,000 for fiscal year
1993 and $6,278,050 for fiscal year 1994. Of the
amounts appropriated for each of fiscal years
1993 and 1994, up to $500,000 shall be available for
use for counseling and other activities in connection with the demonstration program under
section 152 of the Housing and Community Development Act of 1992. Any amounts so appropriated shall remain available until expended.
(b) Loans to nonprofit organizations or public
housing agencies; purpose and terms; repayment; authorization of appropriations; deposit of appropriations in Low and Moderate
Income Sponsor Fund
(1) The Secretary is authorized to make loans
to nonprofit organizations or public housing
agencies for the necessary expenses, prior to
construction, in planning, and obtaining financing for, the rehabilitation or construction of
housing for low or moderate income families
under section 235 of the National Housing Act
[12 U.S.C. 1715z] or any other federally assisted
program. Such loans shall be made without interest and shall not exceed 80 per centum of the

§ 1701x

TITLE 12—BANKS AND BANKING

reasonable costs expected to be incurred in planning, and in obtaining financing for, such housing prior to the availability of financing, including, but not limited to, preliminary surveys and
analyses of market needs, preliminary site engineering and architectural fees, site acquisition,
application and mortgage commitment fees, and
construction loan fees and discounts. The Secretary shall require repayment of loans made
under this subsection, under such terms and
conditions as he may require, upon completion
of the project or sooner, and may cancel any
part or all of a loan if he determines that it cannot be recovered from the proceeds of any permanent loan made to finance the rehabilitation
or construction of the housing.
(2) The Secretary shall determine prior to the
making of any loan that the nonprofit organization or public housing agency meets such requirements with respect to financial responsibility and stability as he may prescribe.
(3) There are authorized to be appropriated for
the purposes of this subsection not to exceed
$7,500,000 for the fiscal year ending June 30, 1969,
and not to exceed $10,000,000 for the fiscal year
ending June 30, 1970. Any amounts so appropriated shall remain available until expended,
and any amounts authorized for any fiscal year
under this paragraph but not appropriated may
be appropriated for any succeeding fiscal year.
(4) All funds appropriated for the purposes of
this subsection shall be deposited in a fund
which shall be known as the Low and Moderate
Income Sponsor Fund, and which shall be available without fiscal year limitation and be administered by the Secretary as a revolving fund
for carrying out the purposes of this subsection.
Sums received in repayment of loans made
under this subsection shall be deposited in such
fund.
(c) Grants for homeownership counseling organizations
(1) In general
The Secretary of Housing and Urban Development may make grants—
(A) to nonprofit organizations experienced
in the provision of homeownership counseling to enable the organizations to provide
homeownership counseling to eligible homeowners; and
(B) to assist in the establishment of nonprofit homeownership counseling organizations.
(2) Program requirements
(A) Applications for grants under this subsection shall be submitted in the form, and in
accordance with the procedures, that the Secretary requires.
(B) The homeownership counseling organizations receiving assistance under this subsection shall use the assistance only to provide homeownership counseling to eligible
homeowners.
(C) The homeownership counseling provided
by homeownership counseling organizations
receiving assistance under this subsection
shall include counseling with respect to—
(i) financial management;
(ii) available community resources, including public assistance programs, mortgage as-

Page 458

sistance programs, home repair assistance
programs, utility assistance programs, food
programs, and social services; and
(iii) employment training and placement.
(3) Availability of homeownership counseling
The Secretary shall take any action that is
necessary—
(A) to ensure the availability throughout
the United States of homeownership counseling from homeownership counseling organizations receiving assistance under this
subsection, with priority to areas that—
(i) are experiencing high rates of home
foreclosure and any other indicators of
homeowner distress determined by the
Secretary to be appropriate;
(ii) are not already adequately served by
homeownership counseling organizations;
and
(iii) have a high incidence of mortgages
involving principal obligations (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 properties that are
insured pursuant to section 203 of the National Housing Act [12 U.S.C. 1709]; and
(B) to inform the public of the availability
of the homeownership counseling.
(4) Eligibility for counseling
A homeowner shall be eligible for homeownership counseling under this subsection
if—
(A) the home loan is secured by property
that is the principal residence (as defined by
the Secretary) of the homeowner;
(B) the home loan is not assisted under
title V of the Housing Act of 1949 [42 U.S.C.
1471 et seq.]; and
(C) the homeowner is, or is expected to be,
unable to make payments, correct a home
loan delinquency within a reasonable time,
or resume full home loan payments due to a
reduction in the income of the homeowner
because of—
(i) an involuntary loss of, or reduction
in, the employment of the homeowner, the
self-employment of the homeowner, or income from the pursuit of the occupation of
the homeowner;
(ii) any similar loss or reduction experienced by any person who contributes to
the income of the homeowner;
(iii) a significant reduction in the income of the household due to divorce or
death; or
(iv) a significant increase in basic expenses of the homeowner or an immediate
family member of the homeowner (including the spouse, child, or parent for whom
the homeowner provides substantial care
or financial assistance) due to—
(I) an unexpected or significant increase in medical expenses;
(II) a divorce;
(III) unexpected and significant damage to the property, the repair of which
will not be covered by private or public
insurance; or

Page 459

TITLE 12—BANKS AND BANKING
(IV) a large property-tax increase; or

(D) the Secretary of Housing and Urban
Development determines that the annual income of the homeowner is no greater than
the annual income established by the Secretary as being of low- or moderate-income.
(5) Notification of availability of homeownership counseling
(A) Notification of availability of homeownership counseling
(i) Requirement
Except as provided in subparagraph (C),
the creditor of a loan (or proposed creditor) shall provide notice under clause (ii)
to (I) any eligible homeowner who fails to
pay any amount by the date the amount is
due under a home loan, and (II) any applicant for a mortgage described in paragraph
(4).
(ii) Content
Notification under this subparagraph
shall—
(I) notify the homeowner or mortgage
applicant of the availability of any
homeownership counseling offered by the
creditor (or proposed creditor);
(II) if provided to an eligible mortgage
applicant, state that completion of a
counseling program is required for insurance pursuant to section 203 of the National Housing Act [12 U.S.C. 1709];
(III) notify the homeowner or mortgage applicant of the availability of
homeownership counseling provided by
nonprofit organizations approved by the
Secretary and experienced in the provision of homeownership counseling, or
provide the toll-free telephone number
described in subparagraph (D)(i); and
(IV) notify the homeowner by a statement or notice, written in plain English
by the Secretary of Housing and Urban
Development, in consultation with the
Secretary of Defense and the Secretary
of the Treasury, explaining the mortgage
and foreclosure rights of servicemembers, and the dependents of such
servicemembers, under the Servicemembers Civil Relief Act (50 U.S.C. App.
501 et seq.), including the toll-free military one source number to call if servicemembers, or the dependents of such
servicemembers, require further assistance.
(B) Deadline for notification
The notification required in subparagraph
(A) shall be made—
(i) in a manner approved by the Secretary; and
(ii) before the expiration of the 45-day
period beginning on the date on which the
failure referred to in such subparagraph
occurs.
(C) Notification
Notification under subparagraph (A) shall
not be required with respect to any loan for
which the eligible homeowner pays the

§ 1701x

amount overdue before the expiration of the
45-day period under subparagraph (B)(ii).
(D) Administration and compliance
The Secretary shall, to the extent of
amounts approved in appropriation Acts,
enter into an agreement with an appropriate
private entity under which the entity will—
(i) operate a toll-free telephone number
through which any eligible homeowner can
obtain a list of nonprofit organizations,
which shall be updated annually, that—
(I) are approved by the Secretary and
experienced in the provision of homeownership counseling; and
(II) serve the area in which the residential property of the homeowner is located;
(ii) monitor the compliance of creditors
with the requirements of subparagraphs
(A) and (B); and
(iii) report to the Secretary not less than
annually regarding the extent of compliance of creditors with the requirements of
subparagraphs (A) and (B).
(E) Report
The Secretary shall submit a report to the
Congress not less than annually regarding
the extent of compliance of creditors with
the requirements of subparagraphs (A) and
(B) and the effectiveness of the entity monitoring such compliance. The Secretary shall
also include in the report any recommendations for legislative action to increase the
authority of the Secretary to penalize creditors who do not comply with such requirements.
(6) Definitions
For purposes of this subsection:
(A) The term ‘‘creditor’’ means a person or
entity that is servicing a home loan on behalf of itself or another person or entity.
(B) The term ‘‘eligible homeowner’’ means
a homeowner eligible for counseling under
paragraph (4).
(C) The term ‘‘home loan’’ means a loan
secured by a mortgage or lien on residential
property.
(D) The term ‘‘homeowner’’ means a person who is obligated under a home loan.
(E) The term ‘‘residential property’’ means
a 1-family residence, including a 1-family
unit in a condominium project, a membership interest and occupancy agreement in a
cooperative housing project, and a manufactured home and the lot on which the home is
situated.
(7) Regulations
The Secretary shall issue any regulations
that are necessary to carry out this subsection.
(8) Authorization of appropriations
There are authorized to be appropriated to
carry out this section $7,000,000 for fiscal year
1993 and $7,294,000 for fiscal year 1994, of which
amounts $1,000,000 shall be available in each
such fiscal year to carry out paragraph (5)(D).
Any amount appropriated under this subsection shall remain available until expended.

§ 1701x
(d)

TITLE 12—BANKS AND BANKING

Prepurchase and foreclosure-prevention
counseling demonstration
(1) Purposes
The purpose of this subsection is—
(A) to reduce defaults and foreclosures on
mortgage loans insured under the Federal
Housing Administration single family mortgage insurance program;
(B) to encourage responsible and prudent
use of such federally insured home mortgages;
(C) to assist homeowners with such federally insured mortgages to retain the homes
they have purchased pursuant to such mortgages; and
(D) to encourage the availability and expansion of housing opportunities in connection with such federally insured home mortgages.
(2) Authority
The Secretary of Housing and Urban Development shall carry out a program to demonstrate the effectiveness of providing coordinated prepurchase counseling and foreclosureprevention counseling to first-time homebuyers and homeowners in avoiding defaults
and foreclosures on mortgages insured under
the Federal Housing Administration single
family home mortgage insurance program.
(3) Grants
Under the demonstration program under this
subsection, the Secretary shall make grants to
qualified nonprofit organizations under paragraph (4) to enable the organizations to provide prepurchase counseling services to eligible homebuyers and foreclosure-prevention
counseling services to eligible homeowners, in
counseling target areas.
(4) Qualified nonprofit organizations
The Secretary shall select nonprofit organizations to receive assistance under the demonstration program under this subsection
based on the experience and ability of the organizations in providing homeownership counseling and their ability to provide communitybased prepurchase and foreclosure-prevention
counseling under paragraphs (5) and (6) in a
counseling target area. To be eligible for selection under this paragraph, a nonprofit organization shall submit an application containing a proposal for providing counseling services in the form and manner required by the
Secretary.
(5) Prepurchase counseling
(A) Mandatory participation
Under the demonstration program, the
Secretary shall require any eligible homebuyer who intends to purchase a home located in a counseling target area and who
has applied for (as determined by the Secretary) a qualified mortgage (as such term is
defined in paragraph (9)) on such home that
involves a downpayment of less than 10 percent of the principal obligation of the mortgage, to receive counseling prior to signing
of a contract to purchase the home. The
counseling shall include counseling with respect to—

Page 460

(i) financial management and the responsibilities involved in homeownership;
(ii) fair housing laws and requirements;
(iii) the maximum mortgage amount
that the homebuyer can afford; and
(iv) options, programs, and actions available to the homebuyer in the event of actual or potential delinquency or default.
(B) Eligibility for counseling
A homebuyer shall be eligible for prepurchase counseling under this paragraph
if—
(i) the homebuyer has applied for a
qualified mortgage;
(ii) the homebuyer is a first-time homebuyer; and
(iii) the home to be purchased under the
qualified mortgage is located in a counseling target area.
(6) Foreclosure-prevention counseling
(A) Availability
Under the demonstration program, the
Secretary shall make counseling available
for eligible homeowners who are 60 or more
days delinquent with respect to a payment
under a qualified mortgage on a home located within a counseling target area. The
counseling shall include counseling with respect to options, programs, and actions
available to the homeowner for resolving the
delinquency or default.
(B) Notification of delinquency
Under the demonstration program, the
Secretary shall require the creditor of any
eligible homeowner who is delinquent (as described in subparagraph (A)) to send written
notice by registered or certified mail within
5 days (excluding Saturdays, Sundays, and
legal public holidays) after the occurrence of
such delinquency—
(i) notifying the homeowner of the delinquency and the name, address, and phone
number of the counseling organization for
the counseling target area; and
(ii) notifying any counseling organization for the counseling target area of the
delinquency and the name, address, and
phone number of the delinquent homeowner.
(C) Coordination with emergency homeownership counseling program
The Secretary may coordinate the provision of assistance under subsection (c) of
this section with the demonstration program
under this subsection.
(D) Eligibility for counseling
A homeowner shall be eligible for foreclosure-prevention counseling under this
paragraph if—
(i) the home owned by the homeowner is
subject to a qualified mortgage; and
(ii) such home is located in a counseling
target area.
(7) Scope of demonstration program
(A) Designation of counseling target areas
The Secretary shall designate 3 counseling
target areas (as provided in subparagraph

Page 461

TITLE 12—BANKS AND BANKING

(B)), which shall be located in not less than
2 separate metropolitan areas. The Secretary shall provide for counseling under the
demonstration program under this subsection with respect to only such counseling
target areas.
(B) Counseling target areas
Each counseling target area shall consist
of a group of contiguous census tracts—
(i) the population of which is greater
than 50,000;
(ii) which together constitute an identifiable neighborhood, area, borough, district, or region within a metropolitan area
(except that this clause may not be construed to exclude a group of census tracts
containing areas not wholly contained
within a single town, city, or other political subdivision of a State);
(iii) in which the average age of existing
housing is greater than 20 years; and
(iv) for which (I) the percentage of qualified mortgages on homes within the area
that are foreclosed exceeds 5 percent for
the calendar year preceding the year in
which the area is selected as a counseling
target area, or (II) the number of qualified
mortgages originated on homes in such
area in the calendar year preceding the
calendar year in which the area is selected
as a counseling target area exceeds 20 percent of the total number of mortgages
originated on residences in the area during
such year.
(C) Mortgage characteristics
In designating counseling target areas
under subparagraph (A), the Secretary shall
designate at least 1 such area that meets the
requirements of subparagraph (B)(iv)(I) and
at least 1 such area that meets the requirements of subparagraph (B)(iv)(II).
(D) Expansion of target areas
The Secretary may expand any counseling
target area during the term of the demonstration program, if the Secretary determines that counseling can be adequately
provided within such expanded area and the
purposes of this subsection will be furthered
by such expansion. Any such expansion shall
include only groups of census tracts that are
contiguous to the counseling target area expanded and such census tract groups shall
not be subject to the provisions of subparagraph (B).
(E) Designation of control areas
For purposes of determining the effectiveness of counseling under the demonstration
program, the Secretary shall designate 3
control areas, each of which shall correspond
to 1 of the counseling target areas designated under subparagraph (A). Each control area shall be located in the metropolitan area in which the corresponding counseling target area is located, shall meet the requirements of subparagraph (B), and shall be
similar to such area with respect to size, age
of housing stock, median income, and racial
makeup of the population. Each control area

§ 1701x

shall also comply with the requirements of
subclause (I) or (II) of subparagraph (B)(iv),
according to the subclause with which the
corresponding counseling target area complies.
(8) Evaluation
Each organization providing counseling
under the demonstration program under this
subsection shall maintain records with respect
to each eligible homebuyer and eligible homeowner counseled and shall provide information
with respect to such counseling as the Secretary or the Comptroller General may require.
(9) Definitions
For purposes of this subsection:
(A) The term ‘‘control area’’ means an
area designated by the Secretary under
paragraph (7)(E).
(B) The term ‘‘counseling target area’’
means an area designated by the Secretary
under paragraph (7)(A).
(C) The term ‘‘creditor’’ means a person or
entity that is servicing a loan secured by a
qualified mortgage on behalf of itself or another person or entity.
(D) The term ‘‘displaced homemaker’’
means an individual who—
(i) is an adult;
(ii) has not worked full-time, full-year in
the labor force for a number of years, but
has during such years, worked primarily
without remuneration to care for the home
and family; and
(iii) is unemployed or underemployed
and is experiencing difficulty in obtaining
or upgrading employment.
(E) The term ‘‘downpayment’’ means the
amount of purchase price of home required
to be paid at or before the time of purchase.
(F) The term ‘‘eligible homebuyer’’ means
a homebuyer that meets the requirements
under paragraph (5)(B).
(G) The term ‘‘eligible homeowner’’ means
a homeowner that meets the requirements
under paragraph (6)(D).
(H) The term ‘‘first-time homebuyer’’
means an individual who—
(i) (and whose spouse) has had no ownership in a principal residence during the 3year period ending on the date of purchase
of the home pursuant to which counseling
is provided under this subsection;
(ii) is a displaced homemaker who, except for owning a residence with his or her
spouse or residing in a residence owned by
the spouse, meets the requirements of
clause (i); or
(iii) is a single parent who, except for
owning a residence with his or her spouse
or residing in a residence owned by the
spouse while married, meets the requirements of clause (i).
(I) The term ‘‘home’’ includes any dwelling
or dwelling unit eligible for a qualified
mortgage, and includes a unit in a condominium project, a membership interest
and occupancy agreement in a cooperative
housing project, and a manufactured home
and the lot on which the home is situated.

§ 1701x

TITLE 12—BANKS AND BANKING

(J) The term ‘‘metropolitan area’’ means a
standard metropolitan statistical area as
designated by the Director of the Office of
Management and Budget.
(K) The term ‘‘qualified mortgage’’ means
a mortgage on a 1- to 4-family home that is
insured under title II of the National Housing Act [12 U.S.C. 1707 et seq.].
(L) The term ‘‘Secretary’’ means the Secretary of Housing and Urban Development.
(M) The term ‘‘single parent’’ means an individual who—
(i) is unmarried or legally separated
from a spouse; and
(ii)(I) has 1 or more minor children for
whom the individual has custody or joint
custody; or
(II) is pregnant.
(10) Regulations
The Secretary may issue any regulations
necessary to carry out this subsection.
(11) Authorization of appropriations
There are authorized to be appropriated to
carry out this subsection $365,000 for fiscal
year 1993 and $380,330 for fiscal year 1994.
(12) Termination
The demonstration program under this subsection shall terminate at the end of fiscal
year 1994.
(e) Certification
(1) Requirement for assistance
An organization may not receive assistance
for counseling activities under subsection
(a)(1)(iii), (a)(2), (c), or (d) of this section, unless the organization provides such counseling,
to the extent practicable, by individuals who
have been certified by the Secretary under
this subsection as competent to provide such
counseling.
(2) Standards and examination
The Secretary shall, by regulation, establish
standards and procedures for testing and certifying counselors. Such standards and procedures shall require for certification that the
individual shall demonstrate, by written examination (as provided under subsection (f)(4)
of this section), competence to provide counseling in each of the following areas:
(A) Financial management.
(B) Property maintenance.
(C) Responsibilities of homeownership and
tenancy.
(D) Fair housing laws and requirements.
(E) Housing affordability.
(F) Avoidance of, and responses to, rental
and mortgage delinquency and avoidance of
eviction and mortgage default.
(3) Encouragement
The Secretary shall encourage organizations
engaged in providing homeownership and rental counseling that do not receive assistance
under this section to employ individuals to
provide such counseling who are certified
under this subsection or meet the certification
standards established under this subsection.

Page 462

(f) Homeownership and rental counselor training
and certification programs
(1) Establishment
To the extent amounts are provided in appropriations Acts under paragraph (7), the
Secretary shall contract with an appropriate
entity (which may be a nonprofit organization) to carry out a program under this subsection to train individuals to provide homeownership and rental counseling and to administer the examination under subsection (e)(2)
of this section and certify individuals under
such subsection.
(2) Eligibility and selection
(A) Eligibility
To be eligible to provide the training and
certification program under this subsection,
an entity shall have demonstrated experience in training homeownership and rental
counselors.
(B) Selection
The Secretary shall provide for entities
meeting the requirements of subparagraph
(A) to submit applications to provide the
training and certification program under
this subsection. The Secretary shall select
an application based on the ability of the entity to—
(i) establish the program as soon as possible on a national basis, but not later
than the date under paragraph (6);
(ii) minimize the costs involved in establishing the program; and
(iii) effectively and efficiently carry out
the program.
(3) Training
The Secretary shall require that training of
counselors under the program under this subsection be designed and coordinated to prepare
individuals for successful completion of the
examination for certification under subsection
(e)(2) of this section. The Secretary, in consultation with the entity selected under paragraph (2)(B), shall establish the curriculum
and standards for training counselors under
the program.
(4) Certification
The entity selected under paragraph (2)(B)
shall administer the examination under subsection (e)(2) of this section and, on behalf of
the Secretary, certify individuals successfully
completing the examination. The Secretary,
in consultation with such entity, shall establish the content and format of the examination.
(5) Fees
Subject to the approval of the Secretary, the
entity selected under paragraph (2)(B) may establish and impose reasonable fees for participation in the training provided under the program and for examination and certification
under subsection (e)(2) of this section, in an
amount sufficient to cover any costs of such
activities not covered with amounts provided
under paragraph (7).
(6) Timing
The entity selected under paragraph (2)(B)
to carry out the training and certification pro-

Page 463

TITLE 12—BANKS AND BANKING

gram shall establish the program as soon as
possible after such selection, and shall make
training and certification available under the
program on a national basis not later than the
expiration of the 1-year period beginning upon
such selection.
(7) Authorization of appropriations
There are authorized to be appropriated to
carry out this subsection $2,000,000 for fiscal
year 1993 and $2,084,000 for 1994.
(Pub. L. 90–448, title I, § 106, Aug. 1, 1968, 82 Stat.
490; Pub. L. 91–609, title IX, § 903(a), (b), Dec. 31,
1970, 84 Stat. 1808; Pub. L. 93–383, title VIII, § 811,
Aug. 22, 1974, 88 Stat. 735; Pub. L. 95–128, title IX,
§ 903, Oct. 12, 1977, 91 Stat. 1149; Pub. L. 97–35,
title III, § 339A, Aug. 13, 1982, 95 Stat. 417; Pub. L.
98–181, title IV, § 465, Nov. 30, 1983, 97 Stat. 1236;
Pub. L. 98–479, title II, § 204(f), Oct. 17, 1984, 98
Stat. 2233; Pub. L. 100–242, title I, § 169, Feb. 5,
1988, 101 Stat. 1865; Pub. L. 100–628, title X, § 1009,
Nov. 7, 1988, 102 Stat. 3266; Pub. L. 101–137, § 8,
Nov. 3, 1989, 103 Stat. 826; Pub. L. 101–625, title V,
§ 577, title VII, § 706(c), Nov. 28, 1990, 104 Stat.
4238, 4286; Pub. L. 102–550, title I, § 162(a)–(d), Oct.
28, 1992, 106 Stat. 3719–3721; Pub. L. 104–316, title
I, § 106(a), Oct. 19, 1996, 110 Stat. 3830; Pub. L.
105–276, title V, § 594(a), (b), Oct. 21, 1998, 112
Stat. 2655; Pub. L. 107–73, title II, § 205, Nov. 26,
2001, 115 Stat. 674; Pub. L. 109–163, div. A, title
VI, § 688(a), Jan. 6, 2006, 119 Stat. 3336; Pub. L.
110–289, div. B, title I, § 2127, July 30, 2008, 122
Stat. 2841; Pub. L. 111–203, title XIV, §§ 1443–1445,
1448, 1449, July 21, 2010, 124 Stat. 2165–2171, 2173,
2174.)
AMENDMENT OF SECTION
Pub. L. 111–203, title XIV, §§ 1400(c),
1443–1445, 1448, 1449, July 21, 2010, 124 Stat.
2136, 2165–2171, 2173, 2174, provided that this
section is amended, effective on the date on
which final regulations implementing such
amendments take effect, or on the date that is
18 months after the designated transfer date if
such regulations have not been issued by that
date:
(1) in subsection (a), by adding at the end the
following:
‘‘(4) Homeownership and Rental Counseling Assistance.—
‘‘(A) In general.—The Secretary shall make financial assistance available under this paragraph
to HUD-approved housing counseling agencies
and State housing finance agencies.
‘‘(B) Qualified entities.—The Secretary shall establish standards and guidelines for eligibility of
organizations (including governmental and nonprofit organizations) to receive assistance under
this paragraph, in accordance with subparagraph
(D).
‘‘(C) Distribution.—Assistance made available
under this paragraph shall be distributed in a
manner that encourages efficient and successful
counseling programs and that ensures adequate
distribution of amounts for rural areas having
traditionally low levels of access to such counseling services, including areas with insufficient access to the Internet. In distributing such assistance, the Secretary may give priority consideration to entities serving areas with the highest
home foreclosure rates.

§ 1701x

‘‘(D) Limitation on distribution of assistance.—
‘‘(i) In general.—None of the amounts made
available under this paragraph shall be distributed to—
‘‘(I) any organization which has been convicted for a violation under Federal law relating to an election for Federal office; or
‘‘(II) any organization which employs applicable individuals.
‘‘(ii) Definition of applicable individuals.—In
this subparagraph, the term ‘applicable individual’ means an individual who—
‘‘(I) is—
‘‘(aa) employed by the organization in a
permanent or temporary capacity;
‘‘(bb) contracted or retained by the organization; or
‘‘(cc) acting on behalf of, or with the express or apparent authority of, the organization; and
‘‘(II) has been convicted for a violation
under Federal law relating to an election for
Federal office.
‘‘(E) Grantmaking process.—In making assistance available under this paragraph, the Secretary shall consider appropriate ways of streamlining and improving the processes for grant application, review, approval, and award.
‘‘(F) Authorization of appropriations.—There
are authorized to be appropriated $45,000,000 for
each of fiscal years 2009 through 2012 for—
‘‘(i) the operations of the Office of Housing
Counseling of the Department of Housing and
Urban Development;
‘‘(ii) the responsibilities of the Director of
Housing Counseling under paragraphs (2)
through (5) of subsection (g); and
‘‘(iii) assistance pursuant to this paragraph
for entities providing homeownership and rental
counseling.’’;
(2) in subsection (c)(5)(A)(ii)—
(A) in subclause (III), by striking ‘‘and’’ at
the end;
(B) in subclause (IV), by substituting ‘‘; and’’
for the period at the end; and
(C) by inserting after subclause (IV) the following:
‘‘(V) notify the housing or mortgage applicant of the availability of mortgage software systems provided pursuant to subsection (g)(3).’’;
(3) in subsection (e)—
(A) by striking paragraph (1) and inserting
the following:
‘‘(1) Requirement for assistance
‘‘An organization may not receive assistance for
counseling activities under subsection (a)(1)(iii),
(a)(2), (a)(4), (c), or (d) of this section, or under
section 1701w of this title, unless the organization,
or the individuals through which the organization
provides such counseling, has been certified by
the Secretary under this subsection as competent
to provide such counseling.’’;
(B) in paragraph (2), by inserting ‘‘and for
certifying organizations’’ before the period at
the end of the first sentence and substituting
‘‘, for certification of an organization, that
each individual through which the organization

§ 1701x

TITLE 12—BANKS AND BANKING

provides counseling shall demonstrate, and, for
certification of an individual,’’ for ‘‘for certification’’ in the second sentence;
(C) in paragraph (3), by inserting ‘‘organizations and’’ before ‘‘individuals’’;
(D) by redesignating paragraph (3) as (5); and
(E) by inserting after paragraph (2) the following:
‘‘(3) Requirement under HUD programs
‘‘Any homeownership counseling or rental
housing counseling (as such terms are defined in
subsection (g)(1)) required under, or provided in
connection with, any program administered by
the Department of Housing and Urban Development shall be provided only by organizations or
counselors certified by the Secretary under this
subsection as competent to provide such counseling.
‘‘(4) Outreach
‘‘The Secretary shall take such actions as the
Secretary considers appropriate to ensure that individuals and organizations providing homeownership or rental housing counseling are aware
of the certification requirements and standards of
this subsection and of the training and certification programs under subsection (f).’’; and
(4) by adding at the end the following:
‘‘(g) Procedures and activities
‘‘(1) Counseling procedures
‘‘(A) In general
‘‘The Secretary shall establish, coordinate,
and monitor the administration by the Department of Housing and Urban Development of the
counseling procedures for homeownership counseling and rental housing counseling provided
in connection with any program of the Department, including all requirements, standards,
and performance measures that relate to homeownership and rental housing counseling.
‘‘(B) Homeownership counseling
‘‘For purposes of this subsection and as used
in the provisions referred to in this subparagraph, the term ‘homeownership counseling’
means counseling related to homeownership and
residential mortgage loans. Such term includes
counseling related to homeownership and residential mortgage loans that is provided pursuant to—
‘‘(i) section 105(a)(20) of the Housing and
Community Development Act of 1974 (42
U.S.C. 5305(a)(20));
‘‘(ii) in the United States Housing Act of
1937—
‘‘(I) section 9(e) (42 U.S.C. 1437g(e));
‘‘(II) section 8(y)(1)(D) (42 U.S.C.
1437f(y)(1)(D));
‘‘(III) section 18(a)(4)(D) (42 U.S.C.
1437p(a)(4)(D));
‘‘(IV)
section
23(c)(4)
(42
U.S.C.
1437u(c)(4));
‘‘(V)
section
32(e)(4)
(42
U.S.C.
1437z–4(e)(4));
‘‘(VI) section 33(d)(2)(B) (42 U.S.C.
1437z–5(d)(2)(B));
‘‘(VII) sections 302(b)(6) and 303(b)(7) (42
U.S.C. 1437aaa–1(b)(6), 1437aaa–2(b)(7));
and

‘‘(VIII) section
1437aaa–3(c)(4));

Page 464
304(c)(4)

(42

U.S.C.

‘‘(iii) section 302(a)(4) of the American
Homeownership and Economic Opportunity
Act of 2000 (42 U.S.C. 1437f note);
‘‘(iv) sections 12773(b)(2) and 12808(b) of
title 42;
‘‘(v) this section and section 1701w of this
title;
‘‘(vi) section 4110(d)(2)(G) of this title;
‘‘(vii) sections 12872(b)(6), 12873(b)(7),
12874(c)(4), 12892(b)(6), and 12893(b)(6) of title
42;
‘‘(viii) section 11408(b)(1)(F)(iii) of title 42;
‘‘(ix) sections 202(3) and 810(b)(2)(A) of the
Native American Housing and Self-Determination Act of 1996 (25 U.S.C. 4132(3),
4229(b)(2)(A));
‘‘(x) in the National Housing Act—
‘‘(I) in section 203 (12 U.S.C. 1709), the
penultimate undesignated paragraph of
paragraph (2) of subsection (b), subsection
(c)(2)(A), and subsection (r)(4);
‘‘(II) subsections (a) and (c)(3) of section
237; and
‘‘(III) subsections (d)(2)(B) and (m)(1) of
section 255 (12 U.S.C. 1715z–20);
‘‘(xi) section 502(h)(4)(B) of the Housing Act
of 1949 (42 U.S.C. 1472(h)(4)(B));
‘‘(xii) section 1701z–7 of this title; and
‘‘(xiii) section 1701z–16 of this title.
‘‘(C) Rental housing counseling
‘‘For purposes of this subsection, the term
‘rental housing counseling’ means counseling
related to rental of residential property, which
may include counseling regarding future homeownership opportunities and providing referrals
for renters and prospective renters to entities
providing counseling and shall include counseling related to such topics that is provided pursuant to—
‘‘(i) section 105(a)(20) of the Housing and
Community Development Act of 1974 (42
U.S.C. 5305(a)(20));
‘‘(ii) in the United States Housing Act of
1937—
‘‘(I) section 9(e) (42 U.S.C. 1437g(e));
‘‘(II) section 18(a)(4)(D) (42 U.S.C.
1437p(a)(4)(D));
‘‘(III)
section
23(c)(4)
(42
U.S.C.
1437u(c)(4));
‘‘(IV)
section
32(e)(4)
(42
U.S.C.
1437z–4(e)(4));
‘‘(V) section 33(d)(2)(B) (42 U.S.C.
1437z–5(d)(2)(B)); and
‘‘(VI)
section
302(b)(6)
(42
U.S.C.
1437aaa–1(b)(6));
‘‘(iii) section 12773(b)(2) of title 42;
‘‘(iv) this section;
‘‘(v) section 12872(b)(6) of title 42;
‘‘(vi) section 11408(b)(1)(F)(iii) of title 42;
‘‘(vii) sections 202(3) and 810(b)(2)(A) of the
Native American Housing and Self-Determination Act of 1996 (25 U.S.C. 4132(3),
4229(b)(2)(A)); and
‘‘(viii) the rental assistance program under
section 8 of the United States Housing Act of
1937 (42 U.S.C. 1437f).
‘‘(2) Standards for materials
‘‘The Secretary, in consultation with the advisory committee established under subsection (g)(4)

Page 465

TITLE 12—BANKS AND BANKING

of the Department of Housing and Urban Development Act, shall establish standards for materials and forms to be used, as appropriate, by organizations providing homeownership counseling
services, including any recipients of assistance
pursuant to subsection (a)(4).
‘‘(3) Mortgage software systems
‘‘(A) Certification
‘‘The Secretary shall provide for the certification of various computer software programs
for consumers to use in evaluating different residential mortgage loan proposals. The Secretary
shall require, for such certification, that the
mortgage software systems take into account—
‘‘(i) the consumer’s financial situation and
the cost of maintaining a home, including insurance, taxes, and utilities;
‘‘(ii) the amount of time the consumer expects to remain in the home or expected time
to maturity of the loan; and
‘‘(iii) such other factors as the Secretary
considers appropriate to assist the consumer
in evaluating whether to pay points, to lock
in an interest rate, to select an adjustable or
fixed rate loan, to select a conventional or
government-insured or guaranteed loan and
to make other choices during the loan application process.
If the Secretary determines that available existing software is inadequate to assist consumers
during the residential mortgage loan application process, the Secretary shall arrange for the
development by private sector software companies of new mortgage software systems that
meet the Secretary’s specifications.
‘‘(B) Use and initial availability
‘‘Such certified computer software programs
shall be used to supplement, not replace, housing counseling. The Secretary shall provide that
such programs are initially used only in connection with the assistance of housing counselors
certified pursuant to subsection (e).
‘‘(C) Availability
‘‘After a period of initial availability under
subparagraph (B) as the Secretary considers appropriate, the Secretary shall take reasonable
steps to make mortgage software systems certified pursuant to this paragraph widely available through the Internet and at public locations, including public libraries, senior-citizen
centers, public housing sites, offices of public
housing agencies that administer rental housing
assistance vouchers, and housing counseling
centers.
‘‘(D) Budget compliance
‘‘This paragraph shall be effective only to the
extent that amounts to carry out this paragraph
are made available in advance in appropriations Acts.
‘‘(4) National public service multimedia campaigns
to promote housing counseling
‘‘(A) In general
‘‘The Director of Housing Counseling shall
develop, implement, and conduct national public service multimedia campaigns designed to
make persons facing mortgage foreclosure, persons considering a subprime mortgage loan to

§ 1701x

purchase a home, elderly persons, persons who
face language barriers, low-income persons, minorities, and other potentially vulnerable consumers aware that it is advisable, before seeking
or maintaining a residential mortgage loan, to
obtain homeownership counseling from an unbiased and reliable sources and that such homeownership counseling is available, including
through programs sponsored by the Secretary of
Housing and Urban Development.
‘‘(B) Contact information
‘‘Each segment of the multimedia campaign
under subparagraph (A) shall publicize the tollfree telephone number and website of the Department of Housing and Urban Development
through which persons seeking housing counseling can locate a housing counseling agency
in their State that is certified by the Secretary
of Housing and Urban Development and can
provide advice on buying a home, renting, defaults, foreclosures, credit issues, and reverse
mortgages.
‘‘(C) Authorization of appropriations
‘‘There are authorized to be appropriated to
the Secretary, not to exceed $3,000,000 for fiscal
years 2009, 2010, and 2011, for the development,
implementation, and conduct of national public
service multimedia campaigns under this paragraph.
‘‘(D) Foreclosure rescue education programs
‘‘(i) In general
‘‘Ten percent of any funds appropriated
pursuant to the authorization under subparagraph (C) shall be used by the Director of
Housing Counseling to conduct an education
program in areas that have a high density of
foreclosure. Such program shall involve direct
mailings to persons living in such areas describing—
‘‘(I) tips on avoiding foreclosure rescue
scams;
‘‘(II) tips on avoiding predatory lending
mortgage agreements;
‘‘(III) tips on avoiding for-profit foreclosure counseling services; and
‘‘(IV) local counseling resources that are
approved by the Department of Housing
and Urban Development.
‘‘(ii) Program emphasis
‘‘In conducting the education program described under clause (i), the Director of Housing Counseling shall also place an emphasis
on serving communities that have a high percentage of retirement communities or a high
percentage of low-income minority communities.
‘‘(iii) Terms defined
‘‘For purposes of this subparagraph:
‘‘(I) High density of foreclosures
‘‘An area has a ‘high density of foreclosures’ if such area is one of the metropolitan statistical areas (as that term is defined by the Director of the Office of Management and Budget) with the highest home
foreclosure rates.
‘‘(II) High percentage of retirement communities
‘‘An area has a ‘high percentage of retirement communities’ if such area is one of the

§ 1701x

TITLE 12—BANKS AND BANKING
metropolitan statistical areas (as that term
is defined by the Director of the Office of
Management and Budget) with the highest
percentage of residents aged 65 or older.
‘‘(III) High percentage of low-income minority communities
‘‘An area has a ‘high percentage of lowincome minority communities’ if such area
contains a higher-than-normal percentage
of residents who are both minorities and
low-income, as defined by the Director of
Housing Counseling.

‘‘(5) Education programs
‘‘The Secretary shall provide advice and technical assistance to States, units of general local
government, and nonprofit organizations regarding the establishment and operation of, including
assistance with the development of content and
materials for, educational programs to inform and
educate consumers, particularly those most vulnerable with respect to residential mortgage loans
(such as elderly persons, persons facing language
barriers, low-income persons, minorities, and
other potentially vulnerable consumers), regarding home mortgages, mortgage refinancing, home
equity loans, home repair loans, and where appropriate by region, any requirements and costs
associated with obtaining flood or other disasterspecific insurance coverage.
‘‘(h) Definitions
‘‘For purposes of this section:
‘‘(1) Nonprofit organization
‘‘The term ‘nonprofit organization’ has the
meaning given such term in section 12704(5) of
title 42, except that subparagraph (D) of such section shall not apply for purposes of this section.
‘‘(2) State
‘‘The term ‘State’ means each of the several
States, the Commonwealth of Puerto Rico, the
District of Columbia, the Commonwealth of the
Northern Mariana Islands, Guam, the Virgin Islands, American Samoa, the Trust Territories of
the Pacific, or any other possession of the United
States.
‘‘(3) Unit of general local government
‘‘The term ‘unit of general local government’
means any city, county, parish, town, township,
borough, village, or other general purpose political subdivision of a State.
‘‘(4) HUD-approved counseling agency
‘‘The term ‘HUD-approved counseling agency’
means a private or public nonprofit organization
that is—
‘‘(A) exempt from taxation under section
501(c) of title 26; and
‘‘(B) certified by the Secretary to provide
housing counseling services.
‘‘(5) State housing finance agency
‘‘The term ‘State housing finance agency’
means any public body, agency, or instrumentality specifically created under State statute that is
authorised to finance activities designed to provide housing and related facilities throughout an
entire State through land acquisition, construction, or rehabilitation.

Page 466

‘‘(i) Accountability for recipients of covered assistance
‘‘(1) Tracking of funds
‘‘The Secretary shall—
‘‘(A) develop and maintain a system to ensure
that any organization or entity that receives
any covered assistance uses all amounts of covered assistance in accordance with this section,
the regulations issued under this section, and
any requirements or conditions under which
such amounts were provided; and
‘‘(B) require any organization or entity, as a
condition of receipt of any covered assistance,
to agree to comply with such requirements regarding covered assistance as the Secretary
shall establish, which shall include—
‘‘(i) appropriate periodic financial and
grant activity reporting, record retention, and
audit requirements for the duration of the
covered assistance to the organization or entity to ensure compliance with the limitations
and requirements of this section, the regulations under this section, and any requirements or conditions under which such
amounts were provided; and
‘‘(ii) any other requirements that the Secretary determines are necessary to ensure appropriate administration and compliance.
‘‘(2) Misuse of funds
‘‘If any organization or entity that receives any
covered assistance is determined by the Secretary
to have used any covered assistance in a manner
that is materially in violation of this section, the
regulations issued under this section, or any requirements or conditions under which such assistance was provided—
‘‘(A) the Secretary shall require that, within
12 months after the determination of such misuse, the organization or entity shall reimburse
the Secretary for such misused amounts and return to the Secretary any such amounts that remain unused or uncommitted for use; and
‘‘(B) such organization or entity shall be ineligible, at any time after such determination, to
apply for or receive any further covered assistance.
‘‘The remedies under this paragraph are in addition to any other remedies that may be available
under law.
‘‘(3) Covered assistance
‘‘For purposes of this subsection, the term ‘covered assistance’ means any grant or other financial assistance provided under this section.’’
See Effective Date of 2010 Amendment note
below.
REFERENCES IN TEXT
The Housing and Community Development Act of
1974, referred to in subsec. (a)(1)(iv), is Pub. L. 93–383,
Aug. 22, 1974, 88 Stat. 633, as amended. Title I of the
Housing and Community Development Act of 1974 is
classified principally to chapter 69 (§ 5301 et seq.) of
Title 42, The Public Health and Welfare. For complete
classification of this Act to the Code, see Short Title
note set out under section 5301 of Title 42 and Tables.
The National Housing Act, referred to in subsecs.
(a)(2) and (d)(9)(K), is act June 27, 1934, ch. 847, 48 Stat.
1246, as amended. Title II of the Act is classified generally to subchapter II (§ 1707 et seq.) of this chapter. For
complete classification of this Act to the Code, see section 1701 of this title and Tables.

Page 467

TITLE 12—BANKS AND BANKING

Section 152 of the Housing and Community Development Act of 1992, referred to in subsec. (a)(3), is section
152 of Pub. L. 102–550, which was set out as a note under
section 1437f of Title 42, The Public Health and Welfare,
prior to repeal by Pub. L. 105–276, title V, § 550(f), Oct.
21, 1998, 112 Stat. 2610.
The Housing Act of 1949, referred to in subsec.
(c)(4)(B), is act July 15, 1949, ch. 338, 63 Stat. 413, as
amended. Title V of the Housing Act of 1949 is classified
generally to subchapter III (§ 1471 et seq.) of chapter 8A
of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see Short
Title note set out under section 1441 of Title 42, The
Public Health and Welfare, and Tables.
The Servicemembers Civil Relief Act, referred to in
subsec. (c)(5)(A)(ii)(IV), is act Oct. 17, 1940, ch. 888, 54
Stat. 1178, as amended, which is classified to section 501
et seq. of Title 50, Appendix, War and National Defense.
For complete classification of this Act to the Code, see
section 501 of Title 50, Appendix, and Tables.
CODIFICATION
Section was enacted as part of the Housing and Urban
Development Act of 1968, and not as part of the National Housing Act which comprises this chapter.
AMENDMENTS
2008—Subsec. (c)(4). Pub. L. 110–289, § 2127(2), struck
out concluding provisions which read as follows: ‘‘An
applicant for a mortgage shall be eligible for homeownership counseling under this subsection if the applicant is a first-time homebuyer who meets the requirements of section 12852(b)(1) of title 42 and the mortgage
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 and is to be insured
pursuant to section 203 of the National Housing Act.’’
Subsec. (c)(4)(C)(iii), (iv). Pub. L. 110–289, § 2127(1),
added cls. (iii) and (iv).
Subsec. (c)(4)(D). Pub. L. 110–289, § 2127(3), added subpar. (D).
2006—Subsec. (c)(5)(A)(ii)(IV). Pub. L. 109–163 added
subcl. (IV).
2001—Subsec. (c)(9). Pub. L. 107–73 struck out heading
and text of par. (9). Text read as follows: ‘‘The provisions of this subsection shall not be effective after September 30, 2000.’’
1998—Subsec. (c)(5)(C). Pub. L. 105–276, § 594(b), amended heading and text of subpar. (C) generally. Prior to
amendment, text read as follows: ‘‘Notification under
subparagraph (A) shall not be required with respect to
any loan—
‘‘(i) insured or guaranteed under chapter 37 of title
38; or
‘‘(ii) for which the eligible homeowner pays the
amount overdue before the expiration of the 45-day
period under subparagraph (B)(ii).’’
Subsec. (c)(9). Pub. L. 105–276, § 594(a), substituted
‘‘2000’’ for ‘‘1994’’.
1996—Subsec. (d)(5)(A). Pub. L. 104–316, § 106(a)(2), substituted ‘‘(9)’’ for ‘‘(10)(K)’’ in introductory provisions.
Subsec. (d)(8). Pub. L. 104–316, § 106(a)(3), struck out
‘‘(for purposes of the study and report under paragraph
(9))’’ before ‘‘may require’’.
Subsec. (d)(9) to (13). Pub. L. 104–316, § 106(a)(1), (4), redesignated pars. (10) to (13) as (9) to (12), respectively,
and struck out former par. (9) which related to GAO
study and report on demonstration program.
1992—Subsec. (a)(3). Pub. L. 102–550, § 162(a), substituted ‘‘except that for such purposes there are authorized to be appropriated $6,025,000 for fiscal year 1993
and $6,278,050 for fiscal year 1994. Of the amounts appropriated for each of fiscal years 1993 and 1994, up to
$500,000 shall be available for use for counseling and
other activities in connection with the demonstration
program under section 152 of the Housing and Community Development Act of 1992.’’ for ‘‘except that for
such purposes there are authorized to be appropriated

§ 1701x

$3,600,000 for fiscal year 1991 and $3,700,000 for fiscal
year 1992.’’
Subsec. (c)(3)(A)(iii). Pub. L. 102–550, § 162(b)(3), added
cl. (iii).
Subsec. (c)(4). Pub. L. 102–550, § 162(b)(4), inserted
flush sentence at end.
Subsec. (c)(5)(A). Pub. L. 102–550, § 162(b)(5), added subpar. (A) and struck out former subpar. (A) which read
as follows: ‘‘(A) IN GENERAL.—Except as provided in
subparagraph (C), if any eligible homeowner fails to
pay any amount by the date the amount is due under
a home loan, the creditor of the loan shall notify the
homeowner of the availability of any homeownership
counseling offered by the creditor and, as a supplement
to counseling provided by the creditor, shall notify the
homeowner of 1 of the following:
‘‘(i) The availability of homeownership counseling
provided by nonprofit organizations approved by the
Secretary and experienced in the provision of homeownership counseling.
‘‘(ii) The toll-free telephone number described in
subparagraph (D)(i).’’
Subsec. (c)(5)(D)(i). Pub. L. 102–550, § 162(b)(6), inserted
‘‘, which shall be updated annually,’’ after ‘‘organizations’’.
Subsec. (c)(8). Pub. L. 102–550, § 162(b)(1), amended
first sentence generally. Prior to amendment, first sentence read as follows: ‘‘There is authorized to be appropriated to carry out this section $6,700,000 for fiscal
year 1991 and $7,000,000 for fiscal year 1992, of which
amounts $2,000,000 shall be available in each such fiscal
year to carry out paragraph (5)(D).’’
Subsec. (c)(9). Pub. L. 102–550, § 162(b)(2), substituted
‘‘1994’’ for ‘‘1992’’.
Subsec. (d)(12). Pub. L. 102–550, § 162(c), amended par.
(12) generally. Prior to amendment, par. (12) read as
follows: ‘‘There are authorized to be appropriated to
carry out this subsection $350,000 for fiscal year 1991
and $365,000 for fiscal year 1992.’’
Subsecs. (e), (f). Pub. L. 102–550, § 162(d), added subsecs. (e) and (f).
1990—Subsec. (a)(2)(A) to (C). Pub. L. 101–625, § 706(c),
designated portions of existing text as cls. (A) and (C),
and added cl. (B).
Subsec. (a)(3). Pub. L. 101–625, § 577(a), substituted
provisions authorizing appropriations of $3,600,000 for
fiscal year 1991 and $3,700,000 for fiscal year 1992, for
provisions authorizing appropriations of $3,500,000 for
each of the fiscal years 1988 and 1989.
Subsec. (c)(5). Pub. L. 101–625, § 577(b)(3), amended par.
(5) generally. Prior to amendment, par. (5) read as follows: ‘‘The creditor of a delinquent home loan shall notify an eligible homeowner of the availability of any
homeownership counseling offered by the creditor. As a
supplement to the counseling provided by the creditor,
the creditor shall notify the homeowner of the availability of 1 of the following:
‘‘(A) Homeownership counseling provided by nonprofit organizations approved by the Secretary and
experienced in the provision of homeownership counseling.
‘‘(B) A list of the nonprofit organizations, approved
by the Secretary and experienced in the provision of
homeownership counseling, that can be obtained by
calling a toll-free telephone number at the Department of Housing and Urban Development.
‘‘(C) Homeownership counseling provided by the Administrator of Veterans’ Affairs for loans insured or
guaranteed under chapter 37 of title 38.’’
Subsec. (c)(8). Pub. L. 101–625, § 577(b)(1), amended
first sentence generally. Prior to amendment, first sentence read as follows: ‘‘There are authorized to be appropriated to carry out this subsection $3,500,000 for
each of the fiscal years 1988 and 1989.’’
Subsec. (c)(9). Pub. L. 101–625, § 577(b)(2), substituted
‘‘September 30, 1992’’ for ‘‘September 30, 1990’’.
Subsec. (d). Pub. L. 101–625, § 577(c), added subsec. (d).
1989—Subsec. (c)(9). Pub. L. 101–137 substituted ‘‘September 30, 1990’’ for ‘‘September 30, 1989’’.
1988—Subsec. (a)(2). Pub. L. 100–628 inserted before period at end of first sentence ‘‘or guaranteed or insured
under chapter 37 of title 38’’.

§ 1701x

TITLE 12—BANKS AND BANKING

Subsec. (a)(3). Pub. L. 100–242, § 169(a), substituted
‘‘except that for each of the fiscal years 1988 and 1989
there are authorized to be appropriated $3,500,000 for
such purposes’’ for ‘‘except that for the fiscal year 1984,
there are authorized to be appropriated not to exceed
$3,500,000 for such purposes’’.
Subsec. (c). Pub. L. 100–242, § 169(b), added subsec. (c).
1984—Subsec. (b)(1). Pub. L. 98–479 substituted ‘‘architectural’’ for ‘‘architechtual’’.
1983—Subsec. (a)(3). Pub. L. 98–181 substituted ‘‘1984’’
for ‘‘1982’’, and ‘‘$3,500,000’’ for ‘‘$4,000,000’’.
1981—Subsec. (a)(3). Pub. L. 97–35 inserted provisions
authorizing appropriations for fiscal year 1982.
1977—Subsec. (a)(2). Pub. L. 95–128 authorized the Secretary to provide the services for other owners of single
family dwelling units insured under subchapter II of
this chapter.
1974—Subsec. (a)(1). Pub. L. 93–383, § 811(b)(1), (c), in
cl. (iii) substituted provisions authorizing counseling
and advice to tenants and homeowners with respect to
property maintenance, etc., for provisions authorizing
counseling on household management, self-help, etc.,
for families receiving assistance under this chapter or
the United States Housing Act of 1937, and added cl.
(iv).
Subsec. (a)(2). Pub. L. 93–383, § 811(b)(2), added par. (2).
Former par. (2) redesignated (3).
Subsec. (a)(3). Pub. L. 93–383, § 811(b)(2), (d), redesignated former par. (2) as (3) and substituted ‘‘such sums
as may be necessary’’ for ‘‘not to exceed $5,000,000’’.
Subsec. (b)(1), (2). Pub. L. 93–383, § 811(e), (f), inserted
reference to public housing agencies.
1970—Subsec. (a). Pub. L. 91–609, § 903(a), designated
existing provisions as par. (1), inserted provision respecting specific authorities without limitation to such
authorities, redesignated former par. (1) as cl. (i),
struck out introductory text relating to assistance
with respect to construction, rehabilitation, and operation by nonprofit organizations of housing for low or
moderate income families now incorporated in cl. (i),
redesignated former par. (2) as cl. (ii), inserting therein
provision for assistance to public bodies or to nonprofit
or cooperative organizations, including assistance with
respect to self-help and mutual self-help programs, and
added cl. (iii) and par. (2).
Subsec. (b)(1). Pub. L. 91–609, § 903(b), substituted
‘‘section 1715z of this title or any other federally assisted program’’ for ‘‘any federally assisted program’’
in first sentence.
EFFECTIVE DATE OF 2010 AMENDMENT
Amendment by Pub. L. 111–203 effective on the date
on which final regulations implementing that amendment take effect, or on the date that is 18 months after
the designated transfer date if such regulations have
not been issued by that date, see section 1400(c) of Pub.
L. 111–203, set out as a note under section 1601 of Title
15, Commerce and Trade.
EFFECTIVE DATE OF 2006 AMENDMENT
Pub. L. 109–163, div. A, title VI, § 688(d), Jan. 6, 2006,
119 Stat. 3337, provided that: ‘‘The amendments made
under subsection (a) [amending this section] shall take
effect 150 days after the date of the enactment of this
Act [Jan. 6, 2006].’’
EFFECTIVE DATE OF 1998 AMENDMENT
Pub. L. 105–276, title V, § 594(c), Oct. 21, 1998, 112 Stat.
2656, provided that: ‘‘The amendments made by this
section [amending this section] are made on, and shall
apply beginning upon, the date of the enactment of this
Act [Oct. 21, 1998].’’
EFFECTIVE DATE OF 1981 AMENDMENT
Amendment by Pub. L. 97–35 effective Oct. 1, 1981, see
section 371 of Pub. L. 97–35, set out as an Effective Date
note under section 3701 of this title.
REGULATIONS
Section 162(e) of Pub. L. 102–550 provided that: ‘‘The
Secretary of Housing and Urban Development shall

Page 468

issue any regulations necessary to carry out the
amendments made by subsection (d) [amending this
section], not later than the expiration of the 6-month
period beginning on the date of the enactment of this
Act [Oct. 28, 1992].’’
CONSTRUCTION OF AMENDMENTS BY PUB. L. 109–163
Pub. L. 109–163, div. A, title VI, § 688(b), Jan. 6, 2006,
119 Stat. 3337, provided that: ‘‘Nothing in this section
[amending this section and enacting provisions set out
as notes under this section] shall relieve any person of
any obligation imposed by any other Federal, State, or
local law.’’
FINANCIAL EDUCATION AND COUNSELING
Pub. L. 110–289, div. A, title I, § 1132, July 30, 2008, 122
Stat. 2727, as amended by Pub. L. 111–203, title X,
§ 1072(a), July 21, 2010, 124 Stat. 2059, provided that:
‘‘(a) GOALS.—Financial education and counseling
under this section shall have the goal of—
‘‘(1) increasing the financial knowledge and decision making capabilities of prospective homebuyers
or economically vulnerable individuals and families;
‘‘(2) assisting prospective homebuyers or economically vulnerable individuals and families to develop
monthly budgets, build personal savings, finance or
plan for major purchases, reduce their debt, improve
their financial stability, and set and reach their financial goals;
‘‘(3) helping prospective homebuyers or economically vulnerable individuals and families to improve
their credit scores by understanding the relationship
between their credit histories and their credit scores;
and
‘‘(4) educating prospective homebuyers or economically vulnerable individuals and families about the
options available to build savings for short- and longterm goals.
‘‘(b) GRANTS.—
‘‘(1) IN GENERAL.—The Secretary of the Treasury (in
this section referred to as the ‘Secretary’) shall make
grants to eligible organizations to enable such organizations to provide a range of financial education
and counseling services to prospective homebuyers or
economically vulnerable individuals and families.
‘‘(2) SELECTION.—The Secretary shall select eligible
organizations to receive assistance under this section
based on their experience and ability to provide financial education and counseling services that result
in documented positive behavioral changes.
‘‘(c) ELIGIBLE ORGANIZATIONS.—
‘‘(1) IN GENERAL.—For purposes of this section, the
term ‘eligible organization’ means an organization
that is—
‘‘(A) certified in accordance with section 106(e)(1)
of the Housing and Urban Development Act of 1968
(12 U.S.C. 1701x(e)[1]);
‘‘(B) certified by the Office of Financial Education of the Department of the Treasury for purposes of this section, in accordance with paragraph
(2); or
‘‘(C) a nonprofit corporation that—
‘‘(i) is exempt from taxation under section
501(c)(3) of the Internal Revenue Code of 1986 [26
U.S.C. 501(c)(3)]; and
‘‘(ii) specializes or has expertise in working
with economically vulnerable individuals and
families, but whose primary purpose is not provision of credit counseling services.
‘‘(2) OFE CERTIFICATION.—To be certified by the Office of Financial Education for purposes of this section, an eligible organization shall be—
‘‘(A) a housing counseling agency certified by the
Secretary of Housing and Urban Development under
section 106(e) of the Housing and Urban Development Act of 1968 [12 U.S.C. 1701x(e)];
‘‘(B) a State, local, or tribal government agency;
‘‘(C) a community development financial institution (as defined in section 103(5) of the Community

Page 469

§ 1701x–1

TITLE 12—BANKS AND BANKING

Development Banking and Financial Institutions
Act of 1994 (12 U.S.C. 4702(5)) or a credit union; or
‘‘(D) any collaborative effort of entities described
in any of subparagraphs (A) through (C).
‘‘(d) AUTHORITY FOR PILOT PROJECTS.—
‘‘(1) IN GENERAL.—The Secretary of the Treasury
shall authorize pilot project grants to eligible organizations under subsection (c) in order to—
‘‘(A) carry out the services under this section; and
‘‘(B) provide such other services that will improve
the financial stability and economic condition of
low- and moderate-income and low-wealth individuals.
‘‘(2) GOAL.—The goal of the pilot project grants
under this subsection is to—
‘‘(A) identify successful methods resulting in
positive behavioral change for financial empowerment; and
‘‘(B) establish program models for organizations
to carry out effective counseling services.
‘‘(e) AUTHORIZATION OF APPROPRIATIONS.—There are
authorized to be appropriated to the Secretary such
sums as are necessary to carry out this section and for
the provision of additional financial educational services.
‘‘(f) STUDY AND REPORT ON EFFECTIVENESS AND IMPACT.—
‘‘(1) IN GENERAL.—The Comptroller General of the
United States shall conduct a study on the effectiveness and impact of the grant program established
under this section. Not later than 3 years after the
date of enactment of this Act [July 30, 2008], the
Comptroller General shall submit a report on the results of such study to the Committee on Banking,
Housing, and Urban Affairs of the Senate and the
Committee on Financial Services of the House of
Representatives.
‘‘(2) CONTENT OF STUDY.—The study required under
paragraph (1) shall include an evaluation of the following:
‘‘(A) The effectiveness of the grant program established under this section in improving the financial situation of homeowners and prospective homebuyers served by the grant program.
‘‘(B) The extent to which financial education and
counseling services have resulted in positive behavioral changes.
‘‘(C) The effectiveness and quality of the eligible
organizations providing financial education and
counseling services under the grant program.
‘‘(g) REGULATIONS.—The Secretary is authorized to
promulgate such regulations as may be necessary to
implement and administer the grant program authorized by this section.’’
[Pub. L. 111–203, title X, § 1072(b), July 21, 2010, 124
Stat. 2060, provided that: ‘‘Amendments made by subsection (a) [amending section 1132 of Pub. L. 110–289, set
out above] shall not apply to programs authorized by
section 1132 of the Housing and Economic Recovery Act
of 2008 [Pub. L. 110–289] (12 U.S.C. 1701x note) that are
funded with appropriations prior to fiscal year 2011.’’]
PRE-PURCHASE HOMEOWNERSHIP COUNSELING
DEMONSTRATION
Pub. L. 110–289, div. B, title I, § 2128, July 30, 2008, 122
Stat. 2841, provided that:
‘‘(a) ESTABLISHMENT OF PROGRAM.—For the period beginning on the date of enactment of this title [July 30,
2008] and ending on the date that is 3 years after such
date of enactment, the Secretary of Housing and Urban
Development shall establish and conduct a demonstration program to test the effectiveness of alternative
forms of pre-purchase homeownership counseling for eligible homebuyers.
‘‘(b) FORMS OF COUNSELING.—The Secretary of Housing and Urban Development shall provide to eligible
homebuyers pre-purchase homeownership counseling
under this section in the form of—
‘‘(1) telephone counseling;
‘‘(2) individualized in-person counseling;

‘‘(3) web-based counseling;
‘‘(4) counseling classes; or
‘‘(5) any other form or type of counseling that the
Secretary may, in his discretion, determine appropriate.
‘‘(c) SIZE OF PROGRAM.—The Secretary shall make
available the pre-purchase homeownership counseling
described in subsection (b) to not more than 3,000 eligible homebuyers in any given year.
‘‘(d) INCENTIVE TO PARTICIPATE.—The Secretary of
Housing and Urban Development may provide incentives to eligible homebuyers to participate in the demonstration program established under subsection (a).
Such incentives may include the reduction of any insurance premium charges owed by the eligible homebuyer to the Secretary.
‘‘(e) ELIGIBLE HOMEBUYER DEFINED.—For purposes of
this section an ‘eligible homebuyer’ means a first-time
homebuyer who has been approved for a home loan with
a loan-to-value ratio between 97 percent and 98.5 percent.
‘‘(f) REPORT TO CONGRESS.—The Secretary of Housing
and Urban Development shall report to the Committee
on Banking, Housing, and Urban Affairs of the Senate
and the Committee on Financial Services of the House
of Representative—[sic]
‘‘(1) on an annual basis, on the progress and results
of the demonstration program established under subsection (a); and
‘‘(2) for the period beginning on the date of enactment of this title [July 30, 2008] and ending on the
date that is 5 years after such date of enactment, on
the payment history and delinquency rates of eligible
homebuyers who participated in the demonstration
program.’’
DISCLOSURE FORM
Pub. L. 109–163, div. A, title VI, § 688(c), Jan. 6, 2006,
119 Stat. 3337, provided that: ‘‘Not later than 150 days
after the date of the enactment of this Act [Jan. 6,
2006], the Secretary of Housing and Urban Development
shall issue a final disclosure form to fulfill the requirement of subclause (IV) of section 106(c)(5)(A)(ii) of the
Housing and Urban Development Act of 1968 [12 U.S.C.
1701x(c)(5)(A)(ii)(IV)], as added by subsection (a).’’

§ 1701x–1. Home inspection counseling
(a) Public outreach
(1) In general
The Secretary of Housing and Urban Development (in this section referred to as the
‘‘Secretary’’) shall take such actions as may
be necessary to inform potential homebuyers
of the availability and importance of obtaining an independent home inspection. Such actions shall include—
(A) publication of the HUD/FHA form HUD
92564–CN entitled ‘‘For Your Protection: Get
a Home Inspection’’, in both English and
Spanish languages;
(B) publication of the HUD/FHA booklet
entitled ‘‘For Your Protection: Get a Home
Inspection’’, in both English and Spanish
languages;
(C) development and publication of a HUD
booklet entitled ‘‘For Your Protection—Get
a Home Inspection’’ that does not reference
FHA-insured homes, in both English and
Spanish languages; and
(D) publication of the HUD document entitled ‘‘Ten Important Questions To Ask Your
Home Inspector’’, in both English and Spanish languages.
(2) Availability
The Secretary shall make the materials
specified in paragraph (1) available for elec-