[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 2239 Enrolled Bill (ENR)]
S.2239
One Hundred Seventh Congress
of the
United States of America
AT THE SECOND SESSION
Begun and held at the City of Washington on Wednesday,
the twenty-third day of January, two thousand and two
An Act
To amend the National Housing Act to simplify the downpayment
requirements for FHA mortgage insurance for single family homebuyers.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,

744bb9888242034f6c077a41ed2cab9e4feac788ebc8e2a9c4de67b5f68ecbaa

This Act may be cited as the ``FHA Downpayment Simplification Act
of 2002''.

f368eff56456b1c4fab5c8c5739b8e0df6eb6d66f28ca8db726280cf03beb520

Section 203 of the National Housing Act (12 U.S.C. 1709) is
amended--
(1) in subsection (b)--
(A) by striking ``shall--'' and inserting ``shall comply
with the following:'';
(B) in paragraph (2)--
(i) in subparagraph (A), in the matter that precedes
clause (ii), by moving the margin 2 ems to the right;
(ii) in the undesignated matter immediately following
subparagraph (B)(iii)--
(I) by striking the second and third sentences of
such matter;
(II) by striking the seventh sentence (relating to
principal obligation) and all that follows through the
end of the ninth sentence (relating to charges and
fees); and
(III) by striking the eleventh sentence (relating
to disclosure notice) and all that follows through the
end of the last undesignated paragraph (relating to
disclosure notice requirements); and
(iii) by striking subparagraph (B) and inserting the
following:
``(B) not to exceed an amount equal to the sum of--
``(i) the amount of the mortgage insurance premium paid
at the time the mortgage is insured; and
``(ii) in the case of--
``(I) a mortgage for a property with an appraised
value equal to or less than $50,000, 98.75 percent of
the appraised value of the property;
``(II) a mortgage for a property with an appraised
value in excess of $50,000 but not in excess of
$125,000, 97.65 percent of the appraised value of the
property;
``(III) a mortgage for a property with an appraised
value in excess of $125,000, 97.15 percent of the
appraised value of the property; or
``(IV) notwithstanding subclauses (II) and (III), a
mortgage for a property with an appraised value in
excess of $50,000 that is located in an area of the
State for which the average closing cost exceeds 2.10
percent of the average, for the State, of the sale
price of properties located in the State for which
mortgages have been executed, 97.75 percent of the
appraised value of the property.'';
(C) by transferring and inserting the text of paragraph
(10)(B) after the period at the end of the first sentence of
the undesignated paragraph that immediately follows paragraph
(2)(B) (relating to the definition of ``area''); and
(D) by striking paragraph (10); and
(2) by inserting after subsection (e), the following:
``(f) Disclosure of Other Mortgage Products.--
``(1) In general.--In conjunction with any loan insured under
this section, an original lender shall provide to each prospective
borrower a disclosure notice that provides a 1-page analysis of
mortgage products offered by that lender and for which the borrower
would qualify.
``(2) Notice.--The notice required under paragraph (1) shall
include--
``(A) a generic analysis comparing the note rate (and
associated interest payments), insurance premiums, and other
costs and fees that would be due over the life of the loan for
a loan insured by the Secretary under subsection (b) with the
note rates, insurance premiums (if applicable), and other costs
and fees that would be expected to be due if the mortgagor
obtained instead other mortgage products offered by the lender
and for which the borrower would qualify with a similar loan-
to-value ratio in connection with a conventional mortgage (as
that term is used in section 305(a)(2) of the Federal Home Loan
Mortgage Corporation Act (12 U.S.C. 1454(a)(2)) or section
302(b)(2) of the Federal National Mortgage Association Charter
Act (12 U.S.C. 1717(b)(2)), as applicable), assuming prevailing
interest rates; and
``(B) a statement regarding when the requirement of the
mortgagor to pay the mortgage insurance premiums for a mortgage
insured under this section would terminate, or a statement that
the requirement shall terminate only if the mortgage is
refinanced, paid off, or otherwise terminated.''.

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Section 245 of the National Housing Act (12 U.S.C. 1715z-10) is
amended--
(1) in subsection (a), by striking ``, or if the mortgagor''
and all that follows through ``case of veterans''; and
(2) in subsection (b)(3), by striking ``, or, if the'' and all
that follows through ``for veterans,''.

affd29a6831c5880fa6fff020d6539f25b77994f16e21cebcea6124dddbb508b

Section 972 of the Higher Education Amendments of 1998 (Public Law
105-244; 112 Stat. 1837) is hereby repealed.

f11651940198854dd558b9d1e1dd0694908dca748ce169832e9cbbb421d2c8c5

(a) The National Housing Act (12 U.S.C. 1701 et seq.) is amended by
inserting after section 206 the following new section 206A (12 U.S.C.
1712A):
``SEC. 206A. INDEXING OF FHA MULTIFAMILY HOUSING LOAN LIMITS.
``(a) Method of Indexing.--The dollar amounts set forth in--
``(1) section 207(c)(3)(A) (12 U.S.C. 1713(c)(3)(A));
``(2) section 213(b)(2)(A) (12 U.S.C. 1715e(b)(2)(A));
``(3) section 220(d)(3)(B)(iii)(I) (12 U.S.C.
1715k(d)(3)(B)(iii)(I));
``(4) section 221(d)(3)(ii)(I) (12 U.S.C. 1715l(d)(3)(ii)(I));
``(5) section 221(d)(4)(ii)(I) (12 U.S.C. 1715l(d)(4)(ii)(I));
``(6) section 231(c)(2)(A) (12 U.S.C. 1715v(c)(2)(A)); and
``(7) section 234(e)(3)(A) (12 U.S.C. 1715y(e)(3)(A));
(collectively hereinafter referred to as the ``Dollar Amounts'') shall
be adjusted annually (commencing in 2004) on the effective date of the
Federal Reserve Board's adjustment of the $400 figure in the Home
Ownership and Equity Protection Act of 1994 (HOEPA). The adjustment of
the Dollar Amounts shall be calculated using the percentage change in
the Consumer Price Index for All Urban Consumers (CPI-U) as applied by
the Federal Reserve Board for purposes of the above-described HOEPA
adjustment.
``(b) Notification.--The Federal Reserve Board on a timely basis
shall notify the Secretary, or his designee, in writing of the
adjustment described in subsection (a) and of the effective date of
such adjustment in order to permit the Secretary to undertake
publication in the Federal Register of corresponding adjustments to the
Dollar Amounts. The dollar amount of any adjustment shall be rounded to
the next lower dollar.''.
(b) Technical and Conforming Changes.--(1) Section 207(c)(3) of the
National Housing Act (12 U.S.C. 1713(c)(3)) is amended--
(A) by inserting ``(A)'' after ``(3)'';
(B) by striking ``and accept that the Secretary'' through and
including ``in this paragraph'' and inserting in lieu thereof:
``(B) the Secretary may, by regulation, increase any of the
dollar amount limitations in subparagraph (A) (as such
limitations may have been adjusted in accordance with section
206A of this Act)''.
(2) Section 213(b)(2) of the National Housing Act (12 U.S.C.
1715e(b)(2)) is amended--
(A) by inserting ``(A)'' following ``(2)'';
(B) by striking ``: Provided further, That'' the first time
that it occurs, through and including ``contained in this
paragraph'' and inserting in lieu thereof: ``; (B)(i) the Secretary
may, by regulation, increase any of the dollar amount limitations
in subparagraph (A) (as such limitations may have been adjusted in
accordance with section 206A of this Act)'';
(C) by striking ``: Provided further, That'' the second time it
occurs and inserting in lieu thereof: ``; and (ii)'';
(D) by striking ``: And provided further, That'' and inserting
in lieu thereof: ``; and (iii)'';
(E) by striking ``with this subsection without regard to the
preceding proviso'' at the end of that subsection and inserting in
lieu thereof: ``with this subparagraph (B)(i).''.
(3) Section 220(d)(3)(B)(iii) of the National Housing Act (12
U.S.C. 1715k(d)(3)(B)(iii)) is amended--
(A) by inserting ``(I)'' following ``(iii)'';
(B) by striking ``design; and except that'' and inserting in
lieu thereof: ``design; and (II)'';
(C) by striking ``any of the foregoing dollar amount
limitations contained in this clause'' and inserting in lieu
thereof: ``any of the dollar amount limitations in subparagraph
(B)(iii)(I) (as such limitations may have been adjusted in
accordance with section 206A of this Act)'';
(D) by striking ``: Provided, That'' through and including
``proviso'' and inserting in lieu thereof: ``with respect to dollar
amount limitations applicable to rehabilitation projects described
in subclause (II), the Secretary may, by regulation, increase the
dollar amount limitations contained in subparagraph (B)(iii)(I) (as
such limitations may have been adjusted in accordance with section
206A of this Act)'';
(E) by striking ``: Provided further,'' and inserting in lieu
thereof: ``; (III)'';
(F) by striking ``subparagraph'' in the second proviso and
inserting in lieu thereof ``subparagraph (B)(iii)(I)'';
(G) in the last proviso, by striking ``: And provided further,
That'' and all that follows through and including ``this clause''
and inserting in lieu thereof: ``; (IV) with respect to
rehabilitation projects involving not more than five family units,
the Secretary may further increase any of the dollar limitations
which would otherwise apply to such projects''.
(4) Section 221(d)(3)(ii) of the National Housing Act (12 U.S.C.
1715l(d)(3)(ii)) is amended--
(A) by inserting ``(I)'' following ``(ii)'';
(B) by striking ``; and except that'' and all that follows
through and including ``in this clause'' and inserting in lieu
thereof: ``; (II) the Secretary may, by regulation, increase any of
the dollar amount limitations in subclause (I) (as such limitations
may have been adjusted in accordance with section 206A of this
Act)''.
(5) Section 221(d)(4)(ii) of the National Housing Act (12 U.S.C.
1715l(d)(4)(ii)) is amended--
(A) by inserting ``(I)'' following ``(ii)'';
(B) by striking ``; and except that'' and all that follows
through and including ``in this clause'' and inserting in lieu
thereof: ``; (II) the Secretary may, by regulation, increase any of
the dollar limitations in subclause (I) (as such limitations may
have been adjusted in accordance with section 206A of this Act)''.
(6) Section 231(c)(2) of the National Housing Act (12 U.S.C.
1715v(c)(2)) is amended--
(A) by inserting ``(A)'' following ``(2)'';
(B) by striking ``; and except that'' and all that follows
through and including ``in this paragraph'' and inserting in lieu
thereof: ``; (B) the Secretary may, by regulation, increase any of
the dollar limitations in subparagraph (A) (as such limitations may
have been adjusted in accordance with section 206A of this Act)'';
(C) by striking ``: Provided, That'' and all that follows
through and including ``of this section'' and inserting in lieu
thereof: ``; (C) the Secretary may, by regulation, increase any of
the dollar limitations in subparagraph (A) (as such limitations may
have been adjusted in accordance with section 206A of this Act)''.
(7) Section 234(e)(3) of the National Housing Act (12 U.S.C.
1715y(e)(3)) is amended--
(A) by inserting ``(A)'' following ``(3)'';
(B) by replacing ``$38,025'' with ``$42,048''; ``$42,120'' with
``$48,481''; ``$50,310'' with ``$58,469''; ``$62,010'' with
``$74,840''; ``$70,200'' with ``$83,375''; ``$43,875'' with
``$44,250''; ``$49,140'' with ``$50,724''; ``$60,255'' with
``$61,680''; ``$75,465'' with ``$79,793''; and ``$85,328'' with
``$87,588'';
(C) by striking ``; except that each'' and all that follows
through and including ``contained in this paragraph'' and inserting
in lieu thereof: ``; (B) the Secretary may, by regulation, increase
any of the dollar limitations in subparagraph (A) (as such
limitations may have been adjusted in accordance with section 206A
of this Act)''.
Speaker of the House of Representatives.
Vice President of the United States and
President of the Senate.

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FHA Downpayment Simplification Act of 2002 — S. 2239

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